Sight-reading on guitar is harder than most other instruments, However, it comes down to just doing it. Just practicing it.
Unless your garden has a tree that grows money, sight-reading material, especially for a particular level of ability costs quite a bit of money.
That's why I started creating sight-reading tools for computers back in 2001 - there was no software on the net back then to help with this (I was searching everywhere). So I set out making my own and made it especially tailored to Guitar and Bass players as they were the most afflicted with this dilemma - and also my particular instrument.
First there was SightReader for the Guitar, then SightReader for Bass (very rudimentary programs with only 1/4 notes, then SightReader Master, which had some rhythms, then Guitar Freak Workstation with SightReader Master Extreme - and then, after 4 years of work, this here Guitar SightReader Toolbox!
Of course, Guitar SightReader Toolbox doesn't just stopped there, I included all the tools from Guitar Freak Workstation and grew them and beautified them in my secret underground lab (love that studio tan).
Here are some ideas when using SightReader:
Remember, it has to sound like music - anybody can learn to type. Don't sacrifice the timing - but do try and put those elements that make the guitar special, vibrato, bending up to a note, open strings, harmonics, etc...
If you make mistake, keep going
Practice reading ahead, Try and memorize the bar ahead and be looking at the next bar (decrease the difficulty or the tempo if needed)
get used to knowing timing figures and what they sound like. In the Sound Reader setup page, if you click on picture between the presets and clean fretboard button, you will see a page that will show you all the different combinations. Click on them to hear the different figures. Do this until you can see a timing chunk and know exactly how it should sound. Choose four at a time and get them down! Next - make a preset with these timings chosen and between 1-5 notes on the fret-board. Generate some music on SightReader and get used to reading in until you can do it perfectly.
If you're going to read some real music... check out the timing, the highest and lowest note and the key and time signature. Make your self a preset and generate a few pages and play them. Your chosen music will then be easier to play.
In order not to lose your place when you are reading music, I suggest you move your eyes and not your head - also, if needed, hold your guitar so that you can see both the fret-board and the sheet music in the same field of vision. That means you don't need to move your head, just your eyes to see either your fret-board placing or your music. This way, you'll keep your place a lot better!
If you're about to delve into the jazz standard books, learn about reading charts (see next post).
Treat it like a challenge - not a chore. Can you become the best sight-reader in your social circle?