Here is an example of a track that is clipping. This is to be avoided at all costs because it is nearly impossible to fix. The red light is the indicator that your file is clipping. Clipping is the total and utter destruction of the tops and/or bottoms of your sound wave and this information can never be recovered. As always, err on the side of caution. It is much better to have tracks that are too low in volume than too loud, especially in the digital age. Remember, your mastering engineer is skilled in the art of maximizing your overall volume in the final master.