Gain reduction is the amount by which a compressor or a limiter has held the input signal down. Most plugins show it in dB, and while the meter is moving away from 0, the processing is attenuating the signal. It is not a measure of how loud the sound is, but of how many dB it is being lowered compared with before processing.
What the meter shows
A gain reduction meter shows how the amount of compression changes over time during playback. It typically moves deeply on loud sounds and returns to 0 as they get quieter. Products display it differently, with a downward bar, a needle, or negative values.
How the settings affect it
Lowering the threshold, raising the ratio, or raising the input gain generally increases gain reduction. But a slow attack lets short peaks through, and a long release keeps attenuating after the sound has died down. Look at how it moves, not only at the maximum value.
It is not the output level
Raising makeup gain or the output gain after compression does not undo the gain reduction that the compression produced. The output meter shows the final signal level, while the gain reduction meter shows how much the processing is attenuating. It matters to read the two separately.
The right amount depends on the material
There is no single correct figure such as 3 dB or 6 dB for every sound. Evening out the level differences in a vocal and using a limiter to stop momentary peaks sound different even at the same number. Deeper is not better; judge from your purpose and from the sound.
Use it together with your ears
The meter helps you spot whether compression is happening, but punch, choking, distortion, and pumping cannot be decided by numbers alone. Match the perceived loudness before and after when you compare, and check that you are getting only the change you wanted. For how it moves in practice, see How to create ducking with a sidechain (Japanese).
