At what level do most use this when using an external mike, recording acoustic guitar?
You need to keep the peaks below 0dB because that’s the maximum for your analog-to-digital converter. If you clip your ADC, you’ll get distorted flat-topped “waves”. A good target to shoot for is is peaks around -6dB. With live recording, it’s hard to predict the peak level and -6dB gives you some headroom for unexpected peaks.
Pros tend to record at about -18dB, but a lower signal level means a lower signal-to-noise ratio. If you have a really good audio interface, you can record at lower levels, but with normal consumer equipment, you’d like to go as close to 0dB as possible without actually hitting 0dB. (You can safely normalize for 0dB peaks after recording.)
Got it, my tone has greatly improved.