I'm a sport flier, I don't race, at least not formally. My goal for setting the needle is good performance, no dead sticks, and slightly rich to promote long engine life. I don't use a tach for setting the needle on 2 strokes. I do use it for 4 strokes, and I also use it to compare props. I find the peak rpms by leaning the needle until I find the peak and then I richen it until I can hear the engine slow down a bit. Once I've done this I hold the plane with the nose in the air 5 to 10 seconds. I do this to confirm 2 things. The first is that it's not too lean. The second is to be sure the muffler pressure helps the engine get enough fuel while it's vertical. I expect the engine to speed up a bit when I first hold it vertical and then hold that speed. If it slows down, I know it's too lean.

Something to remember is that engines will get a bit leaner in the air and will continue to lean out as the tank empties. I feel that taking off close to peak performance is an invitation for a deadstick and short lived engings.