If you want to be certain that your DAW and plugins are processing the way they should be, then you need some control and understanding of signal levels. We often refer to this overall concept as gain staging.
The term originated in the analogue realm and refers to setting your gain in order to maximise the signal to noise ratio. The idea is you keep your signals loud enough throughout the signal path so that the system noise is less significant, but also not so loud that they lead to distortion.
