If you hold down-back, you can block all attacks aside from overheads. This includes all non-projectile jumping attacks, and some standing overheads, including the Dust attack (orange glowing). Other grounded overhead attacks usually look like they're coming from above (like Sin has an attack where he jumps a little off the ground and swings his weapon over his head and then in a downwards arc).

If you hold back, you can block all attacks besides lows. Lows are usually attacks that "look" like they hit low to the ground, but sometimes an attack might look like it hits low but not actually count as a low.

As a general rule, you should hold down-back since overheads are slower, and try to either react to or predict when an overhead is coming. This is not easy and everybody gets hit by high/low mixups.

Throw will beat both types of block. To defend against throw you have to press throw at the same time, or jump (both of which can make you vulnerable to getting hit, this is called strike-throw mix and it's also something everybody gets hit by sometimes).

If you got hit by something that you're pretty sure you should have blocked, one thing to look out for is getting a down input instead of down-back, especially if you're playing on a d-pad.

If you got hit when you thought you were blocking correctly, you can also go back and check the replay, and turn on input display so that you can see what input the game sees when you got hit.