From an old nogrip thread:
"Setting up the car is something you just ease into with experience. Regardless of the car, the track, or the sim, there is no magic combination of parameters that will suddenly make you faster; and resist the impulse to download other peoples' setups, especially hotlap setups (in the length of time it will take to find someone elses setups that "fit" you, you can learn to create your own).
The sequence of adjustments can vary depending on how the car handles, but I usually tweak the bars for basic balance, then the shocks for response, then camber and tire pressure. If the car has wings, you will end up redoing all this for any major wing adjustment: less wing = less downforce = softer springs (they're carrying less weight) = softer shocks = camber adjust ...etc. Also, in a car with wings use the wing adjustments for aero balance/grip (high speed) and chassis adjustments for mechanical balance/grip (low speed).
I've learned more about setups from twenty years of sim racing than from thirty-five years of real racing (I left that to the mechanics, I just wanted to drive). I'm not going to try to tell you 'adjust this to compensate for that', there are many good tutorials that will explain that much better than I can. I hope to describe a system to help you learn when and where to apply that, and to ascertain if, indeed, the setup needs to be changed at all (many handling problems are caused by "the nut behind the wheel"). This works in real life and in sims.
First, as a sim racer you have a major advantage over a real racer - you can drive every car on the grid to decide which one best fits your style. Resist the urge to immediately take the most powerful car or your favorite car, if its handling characteristics don't match your driving style you'll never get the most from it (and you're here to win races, right?).
So, now you have your car; pick a track which you can drive comfortably and don't even think about setups yet. Get on the track and start racking up seat time; take enough laps to warm up the tires, then just start lapping steadily and comfortably - don't even think about running fast laps, don't get near the redline. Just drive the track, keep doing laps til you know every twist and turn and bump, drive until you are sick of the place, drive until you can look away briefly without putting a wheel offline. Now speed up slightly and continue lapping at the new speed, our aim is for consistent laps at each step; keep lapping at this speed until you are as comfortable as you were at the lower speed. Never try lapping faster until you can run you current laptimes as if you were on rails.
Eventually you will reach a point where, at one point on the track, you are not happy with the car. Continue lapping but alter your line slightly at that point, try different braking points, different acceleration points, try everything you can think of to regain a comfortable line at that point. Once you are absolutely certain you cannot improve your driving at this spot should you decide on a setup change. Analyze why the car isn't performing well here and make one, AND ONLY ONE change to the setup.
After warming up the tires, start lapping again, slightly slower than your last times until your laps are again consistent and comfortable, then work up to your previous speed and see how the car handles at the same point on the track. Is it better or worse? Can you alter your driving to make it better? Once you have the car comfortable again at this section of the track, AND ONLY THEN, pick up the pace again.
Continue this process, always making sure you can lap the track consistently and comfortably before trying a faster lap. Each time you encounter a new handling problem, make sure it is not due to your driving before tweaking the setup again; try different lines, braking points, etc. until you are sure your driving can't improve the situation. Then analyze the handling, make one adjustment, go back out and work up to the speed you were running previously. After each setup change you want to make sure you can still lap consistently at the lower speed before resuming the faster speed.
You will reach a point where, at one place on the track, nothing you do improves your speed there - then you are through for that section; continue trying to improve on the rest of the track.
You will encounter situations where a change which improves your time through one area may have an adverse effect on another section of the track, optimize the setup for the area which loses the least time.
Eventually you will have a setup which best matches your driving style to the cars handling characteristics and give you stable, consistent laps. Then it's just a matter of minor tweaks to adapt it to different fuel loads and/or environmental conditions.
I emphasize consistency because you won't win races with a few blazingly fast laps and dozens of average laps.
And I emphasize "comfortable laps" because, unless you only run sprint races, you are going to be in that cockpit for 2-4 hours; wear yourself out early and your laptimes will suffer the rest of the race.
If this seems a drawn out procedure, consider: F1 drivers actually race 32 hours a year (if they finish every race) but how many testing hours have they put in?
But, once you've done this for a few tracks you will find many settings that are unchanged across the board for a particular car and you can create a base setup that can quickly be adapted to any track with a reasonable practice session. For example, my base setups for wingless cars rarely require more than minor tweaks to shocks and bars for most tracks (not counting gears, but that's obvious). "
