This is done automatically by the system and is based on your first few results. As long as someone somewhere in your league has a level, the system can work out everyone else's level based on the chain of results - even if that means working backwards in time. The first pass at this gives an approximate set of levels but this is fine tuned every night so after a week or so of your first results going in, your initial level will be accurate and stable.
Your initial level can also be adjusted by the inter-league calibration process that runs every night as that's how whole leagues are adjusted. These adjustments are normally very small but can be significant over time. Once the leagues are calibrated, they go stable.
We do need two or three representative results within a period of a couple of months to get you going so it can be less accurate if, say, you have one result and then nothing for a few years after that. In these cases it's probably worth a little manual adjustment. If your initial level looks wrong, please get in touch and we can take a look.