How do you know you're ready to move to HF?

You should have a sense for whether you are actually good at stockpicking after a few years on the sell side. When you have conviction in a given name long or short, does it tend to play out? Keep in mind that most ppl tend to overestimate their own abilities so be intellectually honest/rigorous.

Picking the right first opportunity is important as the poster above said. Joining an established MM team with a good track record is low risk (arguably lower risk than most single managers these days). A new MM PM is higher risk AND lower reward (think of average bonus pool for consistently profitable PM vs. the ~70% of new PMs who don't make it). If they don't respond to you asking for performance history with the actual data, run away. 

That said I joined a $3bln SM from the sell side where I knew they had a dogsht book in my sector (I was hired to pick up a new sector), and stayed for 2.5 years as the fund gradually imploded, and still things worked out incredibly well. You really just want to have a good 2 years of runway to learn enough to be useful in case the fund or team goes south. A $1bln + single manager or an established MM team is probably the best way of ensuring that. 

If you can be equally happy making as losing money on the buy side then you'll succeed eventually. The thing is moving from pod to pod, rebuilding the same models, and experiencing down years can really suck mentally. The only way you can power thru is if you genuinely enjoy the work. Personally, all the successful PMs I know never saw themselves doing anything else than discretionary trading and put a single minded focus on making their dream a reality. They've taken many career steps backwards, relocated to tiny cities in the rockies, and been canned multiple times while learning the ropes. All of this is part of the life.

My advice is if you're not sure between buy/sell side then stay where you are. If you're absolutely certain you want to be a PM, then you can afford to be selective in the pod you join, but you should really dedicate yourself full time to finding the right role. Have no doubts, or don't enter the game.