To determine the optimal level of Nightmare Dungeon to run in Diablo 4, players should consider the level of the enemies on the map and target a Tier level that will cause the foes to be at least three levels higher than their character. This will provide a 25% experience buff that will maximize experience gains. Players can calculate the appropriate Tier level by subtracting 51 from their characters level. It is important to note that while higher level monsters grant more experience, players should not sacrifice clear speed by pushing too far, as that will negate the extra experience earned by killing higher level enemies. Ultimately, players should run the level of Nightmare Dungeon that they feel comfortable with and find fun.