Does anyone have any advice on when and for what achievement to move a word from 1 to 2 to 3 and so forth in terms of understanding and remembering it within the reader mode? Does anyone have a system?
I sort of have a system, but I’m sure others have a better one. After I first lingq the word or phrase, then the next time I come across it in a different context, I will change it to 2. I only move from 2 to 3 when I notice some familiarity with the word or can recognize it from a test (which I almost never take). The same applies when going from 3 to 4, I have to again notice that I can recognize at least the nature of the word and/or its likely translation by hearing or reading. When a word is at 4, the only way I mark it known is if I heard or came across the word and immediately knew in context what it meant without having to “figure it out.” Thus, in my case, all known words are truly passively known at least when seen or heard in a context.
Somewhat two answers to this (for me) and they turn on how you consider a word “known” or not.
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At the moment, I have a pretty high threshold before I move a word to Level 4 or “Known.” Essentially I move a word to that level (and thus it increases my known words count) when I am very confident I can recognize it and know what it means OUTSIDE of a context AND am reasonably sure I could actually see myself USING it actively. In the meantime, if that’s not the case yet, and I read a yellow word and know what it means right away without looking it up, I advance it to the next numerical level. As a result, my “real” known words count grows slowly is probably several thousands of words higher than the 31K reflected on LingQ.
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Going forward, with my next language project (eg French, Arabic, Russian, or Chinese), I won’t have such a high criteria for moving a word to known. I will use the Steve way (and what most people here do): I will move a word to known when I can recognize it and know what it means in context. If I don’t know it, even in context, I would make a LingQ and then advance numerical levels based on my confidence that I could or if I merely “guess right.” The only reason I don’t do this now with Spanish is because I was already thousands of words into the process before I realized this and didn’t want to switch for consistency’s sake.
I don’t use 2 and 3. I move a word from 1 to 4 when I am sure I know the word, i.e. knowing what the word means.
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Yes, I do the same thing as you. Mostly because I like either the bright yellow or white, not the lighter yellow shades.
I love this, it is exactly what I have been looking for!
1: I don’t know what it means.
2: I know the meaning without clicking on it but I am not sure.
3: I am pretty sure what it means, I don’t even have to click on it to confirm.
Known: After having seen the word in Level-3 a couple of times. I don’t think I’ll ever forget the meaning.
I even keep the statistics. Beginning of every month, I write down the number of LingQs of each level and calculate the ratio of the words of Level-1 and Level-Known. I began with 3k LingQs with 99% of them being Level-1, and 0.1% of them Level-Known. Now, I have 18k LingQs with 76% of them being Level-1, and about 3% of them being Level-Known. It is kinda fun to see the progress 
It doesn’t really matter.
I don’t do that, I have known, unknown, or LingQ’d, and that’s it.
Same here!
I do pretty much the same thing, but I use the 2 and a 3 as a reminder for myself: I use the twos and threes when I’m pretty sure I could recognize the word in context, but I’m not 100% sure. Later, if I come across a 2 or a 3 again and I can guess the meaning without looking at the hint, I move it to four. It introduces a “second look” of sorts to make sure I know the word. Otherwise, don’t forget that there’s no harm in moving words back down the line.
Another trick I’ve learned is to go into the classic view and look at the list of all the LingQs in a given lesson. If I know the meaning of a word in the list, without the context or the hint, I click on it and move it to 4. It’s a good way to review words and quickly check what I know/don’t know.