Thinking on different levels???

Can someone please explain:How many levels are there...what are the "requirements for each level...and how would you know if you go up a level??? all I know is this has something to do with the metagame.

Levels have to do with what you hold, then what you think that your opponent holds.

Then, then next level is what you think that you think your opponent thinks that you hold.

In theory there is no end to the number of levels, but it becomes more applicable the better you and your opponent know each other, like if you've played them at a weekly game for years and you like to try to outplay each other.