Optical frequency domain reflectometry (OFDR) is widely used in various fields. This paper presents an optimized wavelength selection matching (WSM) and local cross-correlation (LCC) technique for real-time strain monitoring based on OFDR. WSM is employed to extract waveform features and identify suspected strain locations. LCC is used to calculate the strain at these suspected locations to obtain accurate results. According to the results, with the optimized method, the strain localization error is below 0.02% in various situations. Meanwhile, the demodulation speed outperforms traditional algorithms in all aspects.