What can I learn from penalty points?

[GrayJay]

I'd like to have some tips regarding penalty points in competitions. I think they will help me learn which competitions are best for my horse but I'm not sure. I think it is partly related to BCS (i.e., if your horse's BCS is not ideal for the race then they will have penalty points, right?). If the horse's BCS is correct for the race but there are still penalty points, then is it because they don't have the right build for the race? Or is it based on the horses's imagined performance during the race? I supposed penalty points mean different things depending on the type of competition as well. Basically I'm just trying to learn what I can from how my horse is performing in local shows and player-made competitions to try and narrow down which competitions they are best in. Sometimes my horse will win local show and their BCS is correct for the discipline but they have penalty points so I want to know if that means there is something else I should be avoiding. For example, I entered a Belgian with correct BCS for a cross-country local show (Level 1), even though that's not a good type of race for Belgians. My horse placed 1st, but with 24-something penalty points. Is that because the build of the horse is too heavy for that type of race?
Any tips you can give are much appreciated. Thanks!