You can filter or exclude items for various reasons. One example being items out of stock. First you have to create a rule and you have to make sure the items you want the rule to be effective for meet the 'if' criteria.
If you want to exclude items: 'Then' take 'all fields' and 'exclude'. In the example below all items with 'Red' in the field 'color' will be excluded.
It is also possible to apply other actions to the selected items, see this page for common rules.