Whether you are doing MMA, Muay Thai, kickboxing, boxing, karate, or any other martial art, sparring is an essential ingredient to your progression as a martial artist. I would go as far as to say that it is the most important aspect of your training. Sparring tests your technique in a realistic environment. If your instructor doesn't let you spar, you should leave that gym.
But let's get something straight---sparring is not a street fight. Sparring is not done to hurt one another. That is not what sparring is about. Sparring is about improving your technique in whatever combat sport you are training.
Of course, that doesn't mean you shouldn't go hard during sparring. There is definitely time to go close to 80 to 90% during a sparring session. However, martial artists should do their hard sessions sparingly. Rather, the majority of your sparring sessions should be on the lighter end.
Purpose of Sparring
As previously stated, the purpose of sparring is not to beat each other up. Rather it is to work on your weakness and improve on your strengths. To that end, sparring should be done with emphasis on technique and gradual improvement in various aspects of your game.
Here is the breakdown below of how often you should spar for each "type" of sparring:
Light Touch/ No Touch Sparring (Movement Sparring)
This is the lightest form of sparring. With this type of sparring, you will barely graze each other or not even at all. This type of sparring is not the same as light sparring. This type of sparring is actually a cross between drilling and light sparring. It is more dynamic than drilling but less chaotic than other types of sparring.
You are working on your movement or a specific technique---moving in and out, countering, cutting angles, shooting for takedowns, slipping, sprawling, striking while moving, etc.
Everyone should benefit from this type of sparring. Novices should find this especially helpful. They may not be used to the dynamism and chaos of full contact sparring. It is not so easy that it is boring, but it is also not so challenging that it is overly stressful. This creates a difficulty level that is optimal for learning. In psychology, this is called being in a "flow state" and colloquially known as being "in the zone."
With this type of sparring, you and your partner work out what you want to specifically work on so that your opponent can throw them for you to work. For instance, if you want to work on slipping the jab, your partner will want to make sure he throws a lot of jabs during sparring. Or if you want to work on counters, make sure your opponent is the one pushing the action in order for you to counter.
If you want to work on your sprawling, you will want to have your partner shoot for slow takedowns at random intervals so you get to work on your sprawls.
With this type of sparring, you and your partner will work together to make sure that you have set parameters for sparring and both know what the other person will be mostly doing. Nothing tricky or out of the ordinary. You should do this type of sparring strictly to get comfortable with certain movements and techniques.
Here is an example of this type of sparring done in boxing:
Martial artists should do this type of sparring as much as possible.
This is the next level up. With light sparring, you work your technique with light contact. This type of sparring is also good to do on a regular basis. Light sparring simulates a real fight but you are still able to be creative and try out new things without being afraid of taking heavy damage. With hard sparring, you aren't able to open up and try out new things because you are too busy not getting hurt.
Fighters should do this type of sparring to refine old movements and techniques, as well as try out new ones.
How light is light sparring? I consider light sparring to be something that even people new to martial arts do not need headgear for and none of the contact should hurt.
Martial artists should do this type of sparring on a regular basis, whenever possible.
Moderate Pace Sparring
This is where things get interesting. Moderate pace sparring is when you should start thinking about putting on headgear. And moderate pace sparring is light to some and heavy to others. A good gauge of moderate pace sparring is when you can maintain the same pace for 10 three-minute rounds, but still be really tired at the end. With moderate pace sparring, you are putting your skills to the test. With this type of sparring, you are expecting to get hit and are expected to hit back. This type of sparring will hurt a little during and will definitely hurt in the days after.
This type of sparring is great for testing yourself and seeing what you need to work on. At this pace, you should work on volume while taking a bit off your power.
Martial artists should do this type of sparring 1-2 times per week at max.
Hard sparring will keep you absolutely wiped and should hurt during and after. It is the ultimate test of your skills and best simulates a real fight. And because of that, you should be wearing headgear when doing it.
Here is an example of extremely hard sparring from Mike's Gym in the Netherlands. These two are going very hard, even by "hard sparring" standards. The gym notoriously for going extremely hard---and they are also known for turning out a lot of champion kickboxers. So they are doing something right.
Martial artists should do hard sparring at most 1-4 times a month depending on what combat sport you are doing and if you have a fight coming up.
It is generally smart advice to not do any hard sparring a week before your competition.