Resources allows you to create as many levels of folders as you choose, but best practices indicate that your files will be easier to manage and navigate if you limit the structure to three levels deep. Plan your folder structure ahead of time, rather than creating folders at random, to make a system that will be easy to maintain and sustainable as you continue to use it. Before migrating entire folders from File Manager, decide whether that is the best way to organize those files.
For example, you may want to have folders for each sport arranged by team and year. Whether you put the team first or the year first is up to you; however, an Athletics > Team > Year structure means that you only have to create the team folders once, while an Athletics > Year > Team folder structure will require you to make folders for each team every year.