auto-number title

I want to see this

1 Level 1 title
Level 2 text…

1.1 Level 2 title
Lever 2 text…

1.2 Level 2 title
Lever 2 text…

1.2.1 Level 3 title
Lever 3 text…

etc.

The prefix <$n> just adds a 1 to all of them.

Try using <$hn> to get the hierarchical numbering you want.

You might also want to take a look at the Autonumbering section of the Placeholder Tags list (on the Help menu click Placeholder Tags List), which will give you a wide range of numbering tags to experiment with.