I picked up some more knowledge from the experts on Baidu Tieba, so I’m sharing it below.

When you pull the mixture back, you will eventually reach a highest EGT value —- Peak. At this point, if you push the mixture forward a bit, it is called Rich of Peak. At this point, if you pull the mixture back a bit, it is called Lean of peak.

When you push forward a bit to reach a value slightly lower than the maximum EGT, you often obtain a maximum Thrust mixture ratio. For example, if the peak is 500 degrees and you push the mixture forward to reach 475 degrees where the Thrust is maximum, it is called 25 degree rich of peak.

Conversely, when you pull back a bit to reach a value slightly lower than the maximum EGT, you often obtain the most economical mixture ratio. For example, if the peak is 500 degrees and you pull the mixture back to reach 475 degrees which is most economical, it is called 25 degree lean of peak.

If your aircraft has very precise electronic instruments to measure EGT and CHT simultaneously, you can use LEAN OF PEAK.

Most light aircraft do not have such precise instruments. Cessna only has an EGT, and the POH stipulates that lean of peak is prohibited. Peak and Lean of peak are both very dangerous. The EGT sensor only detects one cylinder, while your engine has 4 cylinders; heaven knows when your engine might experience a cylinder failure? The four cylinders will have an unbalanced mixture; if one cylinder is lean of peak, the other three cylinders are still at peak. With Rich of Peak, a small amount of unburned fuel will evaporate throughout the engine, which can lower the temperature.