Look at the "business end" of the spark plug - see that porcelain bit inside the metal shell?
The difference between a "hot" and "cold" plug is the length of that porcelain nose. A "hot" plug has a longer nose to retain heat; while a "cold" plug has a shorter nose to drain it away.
A "hot" plug is usually used when you have a good deal of carbon fouling, slight oil fouling (be careful here!) or some fuel fouling - the additional retained heat helps to burn the working end of the plug clear.
(I note the care needed with oil fouling - oil getting into the cylinder lowers the overall octane rating of the air-fuel mix, which can lead rapidly to autoignition/detonation.)
A "cold" plug is generally used with forced induction - since compressing air heats it up. This lessens the effect of the retained heat in the spark plug working end, reducing the likelihood of autoignition/detonation due to retained heat.
Any changes in spark plug heat range should only be done one step at a time, and you want to run it for a couple of weeks of daily service to make sure it's not causing any other trouble (particularly if you go one step hotter - it's easy to wander into detonation problems.)
Monitor the colour of the porcelain on the working end of the plug - when everything is running properly, there should be very light deposits and a pale straw yellow colour to the insulator. Learning how to "read" spark plugs is a useful skill - I refer you to Chilton's manuals, which tend to have a very useful colour plate giving this information (it's the same in all manuals - so just find one and study it.)
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