Direction of the traffic. Traffic IN is coming into the firewall interface, while traffic OUT is going out of the firewall interface. In visual terms: [Source] -> IN -> [Firewall] -> OUT -> [Destination]. The default policy is to filter inbound traffic, which means the policy applies to the interface on which the traffic is originally received by the firewall from the source. This is more efficient from a traffic processing perspective. In most cases, the default policy will be the most appropriate.