What does the term mean?
It means that you are studying the entries in a certain race, and trying to figure out which is a good horse to win or lose a race.
For a novice or expert handicapper it's often easier to start handicapping a race by finding the losers rather than the winners. Look at each horse entered in the race and try to find horses that are obviously overmatched. Do their speed figures fit with the other horses? In looking at their last few races are they in good form or bad? Do they have recent workouts that suggest they are fit and ready? Are they racing at a distance or on a surface that they do not like? Are they making too big of a class jump? Throw out as many duds as you can and hopefully you are only left with a handful of contenders. Next, try to imagine how the race will unfold, look at the pace scenario and try to figure out if it will be an advantage or disadvantage to your remaining horses. Try to eliminate another horse or two based on the expected pace scenario. In the end you should only have 3-4 horses that are candidates for winning the race, make your selection based on their their record at the track, distance, average speed ratings, trainer and jockey. If you still end up with too many horses that are logical contenders, pass the race. Handicapping is about using your skills to figure out the winner, not gambling. Watch the races you don't bet on with as much interest as those you do. See if the race unfolds the way you thought it would, look at the results and ask yourself if the results are consistent with what you knew going into the race. Make a note of any horse that had serious trouble in the race and make sure to use that to your advantage the next time he runs. Have fun and keep learning - handicapping horse races is truly a great game.
You are looking at this from a wagering standpoint. Which horse are you betting on to win. To do this, you study the racing form and weed out horses from past performances, breeding, etc. Good luck