Many people don't do this but from what I found, "Keep this pace" (the green straight arrow works just as well.) Let me explain. This is when and why I used all the pace buttons.
Pace Up: When on straights and catching up to a driver, I tell him to push it a bit more to see if he is able to pass the driver in front of him.
Pace Down: When I see that when he tries to gun it around the corner and ends up spinning out or understeering. I tell him to pace down so he calms down and then I use....
Keep Pace: People don't know this but keeping pace, especially on tracks with a lot of turns, works very well. Don't use this when he is all the way at the red, use it when he is in the bottom half of the red to middle that way it stays slightly aggressive but composed.
Overtake: I use this mainly on turns because if you haven't noticed, if you push this before a turn you will see that his braking point has moved up for that turn making him out brake the driver in front. He may not pass the other driver but even so, he has moved up closer to the car in front.
When to use it:
Pace Up: Straight aways and small turns that allow your driver to be flat out.
Keep Pace: When in the lead or top 3, helps them handle the pressure of close racing.
Pace Down: When you notice your driver is starting to mess up and/or when you see your driver's car has less then 50% tread left.
Overtake: On turns so that your driver can out-brake your opponent and when your driver is on the tail of the car in front of him.
Mashing Pace Up and Overtake doesn't work on all tracks, so just take my advice for those other tracks where you are having difficulty. Remember, you don't win the race on the first lap, only on the last turn.