As with ignition timing, accurate valve timing, or cam timing as some people refer to it, is critical for achieving maximum horse power delivery from your engine. The first thing you need to accurately set your cam timing is a timing degree wheel, or a cam timing disc, that you can get from your camshaft manufacturer. You also need a dial gauge with a magnetic stand to find true top dead center (TDC) of the no. 1 cylinder and the correct valve lift, and an adjustable vernier gear.
It is easiest to set the cam timing before the cylinder head is fitted to the engine. You need to accurately determine TDC using the dial gauge and accurately mark TDC on the crankshaft pulley. Usually, the car manufacturer would mark TDC on the crankshaft pulley, but you should verify that it is marked accurately as if it is even just a few degrees out, it can have a significant effect on power delivery. Accurately marking TDC on the crankshaft pulley will also be helpful when want to check or adjust the cam timing at a later stage, with the engine fully assembled and fitted.
The next step is to bolt the cam timing degree wheel to the crankshaft, fit a temporary pointer to the engine block and set the pointer to TDC or 0° on the cam timing degree wheel. Then fit the cylinder head and install the camshaft, or camshafts if it's a twin-cam cylinder head. The engine should be at TDC and at the end of the compression stroke on the no. 1 cylinder, so the camshafts should be installed with the intake and exhaust valves of the no. 1 cylinder closed.
The camshaft manufacturer or grinder will provide you with a specified valve lift and the point at which that valve lift for the intake valves and the exhaust valves should be achieved. This may be for full-lift, or a specified amount of valve lift with the valve opening. Also, the point at which the valve lift is achieved is measured in degrees of crankshaft rotation, which is why we bolted the timing degree wheel to the crankshaft. Our next step is to attach the dial gauge to the cylinder head, with the stylus on the intake valve of the no. 1 cylinder and zero the dial gauge. Now rotate the crankshaft to the specified point at which the specified valve lift should be achieved and read the amount of valve lift off the dial gauge. If it is not the same as the valve lift specified by the manufacturer, then free up the vernier gear and turn the camshaft until the correct valve height is achieved. Take care not to let the valves hit the crown of the piston while you're doing this adjustment as the valves could bend quite easily. With the specified valve lift of the intake valve occurring at the specified degrees of crankshaft rotation, tighten up the vernier gear. Your intake valve timing is now set. On a single-cam cylinder head you just need to verify that the exhaust valve also reaches the specified valve lift at the specified point. But on a twin-cam cylinder head you will need to set your exhaust valve timing by repeat this process for the exhaust valve of the no. 1 cylinder.
It's quite easy in theory, but a bit more complicated if you need to determine the exact point that full-lift is achieved and the same applies to determining TDC accurately.
Finding TDC accurately is a bit complicated as the piston is stationary at its apex for a few degrees of crankshaft rotation. Thus assuming that TDC has been reached when the piston is at its apex is not accurate enough when you want to set cam timing. This is where the dial gauge and the timing degree wheel come in quite handily. Bolt the degree wheel to the crankshaft, fit a temporary pointer to the engine and place the dial gauge on the engine block with the stylus the no. 1 piston. Determine when the piston is at its apex and zero the dial gauge. Now rotate the crankshaft until the piston is a short distance, say ¼ inch or 5 mm, below its apex. Mark this point on the degree wheel. Now turn the crankshaft in the opposite direction until the piston is at the same distance below its apex and mark this point on the degree wheel. True TDC would be the mid-point between the two marks on the degree wheel.
The same technique can be used to determine when the camshaft reaches full valve lift. The toe of the camshaft lobe is shaped to keep the valves at full lift for as long as possible, which is usually a good number of degrees. If you need to find full lift as your reference point when setting your cam timing, you need to find the exact point of full valve lift. Start with the engine at TDC. Then turn the crankshaft back until the camshaft lobe acting on the intake valve of the no. 1 cylinder is pointing more or less upward and the intake valve is fully closed. Set up the dial gauge with the stylus on the valve retainer cap of the intake valve and zero the dial gauge. Now rotate the crankshaft until the intake valve opens and is a short distance, say 0.1 inch or 0.25 mm, past full lift. Mark this point on the degree wheel. Then turn the crankshaft in the opposite direction and stop when the intake valve starts to close and is at the same distance from full lift. Mark this point on the degree wheel. Needless to say, the point of full lift for the intake valve would be the mid-point between the two marks on the degree wheel. Now you just need to repeat this process to find the point of full lift for the exhaust valve.