There is a very easy answer to that question, the best level for your child is the level in which they will be most successful. However, the complicated part to that answer is understanding the factors that lead to success. There are many factors to consider.
Using the factors above coaches use the "Goldilocks Gauge" by Smart Steps. Finding the spot that is just-right. The spot where your gymnast is physically challenged, emotionally engaged, and intellectually stimulated.
There are numerous quotes about all roads leading to the same destination. There is certainly some truth to this in gymnastics. The goal of coaches is to choose the road with the fewest obstacles and the most opportunity for growth. One great example of this is Pinnacle's current level eight team. Of the eight gymnasts on the team there were many different roads taken. We had several athletes skip level five, a few skipped level six, one athlete repeated level six and then skipped seven, two others repeated level eight, while yet another competed Xcel Silver, Gold, and Platinum as her road to level eight. All eight are happy, successful level eights this season. I like to think this is because they moved through the levels in the way that was most successful for them each season.
Gymnastics levels can be difficult to understand. Levels 3-5 have set, compulsory routines. While Level 6-10 and Xcel Bronze, Silver, Gold, Platinum, Diamond have set skill requirements. As a parent and gymnast you do not have to know every requirement and detail. Trust that your coach does and will guide you to the best spot.