Setting the correct recording levels is an important part of getting ready to record. In the days of analog tape, it was common to record as “hot” as possible to minimize the noise inherent in the tape itself. With digital recording, the most important thing is to not exceed the maximum signal level of 0 dB, and it’s a good idea to leave plenty of headroom. When setting levels, play the loudest you expect to play and aim for peaks of no more than -6 dB, with average levels around -20 dB. This leaves room in case you play louder on an actual take, or if you want to add EQ when mixing.
When recording in stereo, it’s important to check that levels are balanced between channels. If you are using a conventional stereo mic arrangement like X/Y, it’s best to set the controls on both channels to the same gain (assuming you have separate controls) and balance the levels by mic positioning. Setting and balancing levels while playing is difficult, so it helps to learn to use the meters in your recorder. Most systems have VU meters that show the levels on each channel as you play. Computer-based systems may have other meters. One commonly-used tool is a goniometer, which displays a Lissajous figure that can help adjust both the channel balance and “phase” between the mics. Phase affects how multiple mics sound when blended to mono. Out-of-phase mics produce cancellation at various frequencies and can make your guitar sound thin. One benefit of an X/Y mic arrangement is that the mics are very closely in-phase. Learning what meters your system has and how they work can greatly speed up the process of setting up mics.