The following method is taken from the WM manual TURBOHYDRAMATIC 400
TORQUE CONVERTER TRANSMISSION - section T2 - Servicing. A good oil level is important becasue, as the same source points out :
an overfilled transmission will result in foaming*; a low level may result in loss of drive when cold engine; insufficient fluid damages the transmission.
*Foam is a collection of small bubbles of air that accumulate on or near the surface of the fluid. [..] Foam is an efficient thermal insulator, so the temperature of the oil can become difficult to control. The presence of air bubbles in the fluid can lead to excessive oxidation, cavitation, the reduction of lubricating properties of the oil and hydraulic system failure. Source : http://www.machinerylubrication.com/.