I'll cut it down to it's simplest form, as most DAW meters have this it should be easy to explain. Green = good, orange = be careful, red = bad. I'm sure they went with the traffic lights system for that exact reason.. Also it's the reason I always recommend a tracking compressor / limiter, it helps keep things flowing smoothly.. You don't need to do much in the way of gain reduction. A lot of interfaces have limiter functionality built in, even if it doesn't you can get something like an ART Tube pre-amp with a limiter function in it for like $80.00. That $80.00 is worth it not to wreck your perfect take. Sure for most things it shouldn't be an issue if you're not tracking too hot, but unless you're a highly experienced singer that knows exact positioning it can and probably will be cheap insurance.