How do I needle cancel? ( How is it effective )
You Need Cancel by pressing and holding B until Sheik's arm is behind her or longer. Then you can press R or L to cancel the animation. I usually use a light shield input to ensure the shield doesn't come out, but it's not necessary. You just have to be quick with it.
It's incredibly usefull for a number of reasons.
For example after a KO you see Sheiks charging needles until they have a maximum of 6. In order to keep them and not shoot them all away emediatly, you can store them by cancelling the animation.
And as with any character in the game if you tap the opposit direction while airborn and then press B you will turn around in the air and perform the neutral B move. Most characters don't find this particularly useful since B moves tend to have a long animation, but yet have minimum landing lag (4 frames?).
Since we are able to cancel the needle charging animation we escape the long Neutral B animation (throwing the needle) and are free to do what we want, being grabbing the Ledge out of a running Short Hop Fast Fall, reaching far off stage with a Back Air or other stuff. It's fun to play around with.
Is there any advanced sheik tech I should be learning? ( What are they and how are they effective )
Prioritize the fundamental Sheik specifics high. When all that feel natural you can try and add more advanced stuff.
What is sheik neutral game?
1. Deal enough damage so the opponent is above CC percent
2. Make Fair setups
3. Edge Guard
What are the moves I should be using for spacing?
Walk and WD
What moves should I not be using at all or are considered bad? (Besides side-b )
Forward Smash, Forward Throw, Dair is very situational and generally bad. I like it alot but it's not a newcomer's go-to.
Who are all the characters I can chain grab with down throw?
I play PAL so I don't know