If seismic data contained nothing but reflections, then there would be little trouble plotting it. You would simply multiply by t 2 and then scale so that the largest data values stayed in the available plotting area. We have noisy traces because the people in the world won't all be quiet while we listen for echoes. Noise propagation modes are waves trapped in surface layers. Water noises are additionally strong because of the homogeneity and low absorption of water.
Clipping means that values larger than the clip value are replaced by the clip value.
Since the size of the noise is generally unpredictable, the most reliable method is to use quantiles. Imagine the data points sorted in numerical order by the size of their absolute values. So if data is clipped at the percentile, then up to one percent of the data can be infinitely strong noise. So I often clip at thrice the percentile. To find the quantile, it is not necessary to fully sort the data.