you can read about it right here bud
you start at rank 10th kyu and playing matches, win or lose, progresses you from 10th to 1st kyu. winning gets you more progress than losing, naturally, but getting your feet wet in any capacity will rank you up.
From 1st kyu you rank to 1st Dan, then move up through 10th Dan. I believe at this point you must win to progress but there's no rank penalty for losing.
after 10th Dan is Hunter, at this point losing matches will cost you progress towards your next rank. you can have 0xp and still be a hunter, though, but any rank higher can get demoted for losing. so Hunter is like the lowest rank you can fall to at some point. there's lots of scrubs on PSN with like 30,000 games and they're still hunters, lol. some never learn
this is the same ranking systems that the arcade version uses, although the higher ranks are more restrictive there. there's also star players, fuudo is one.