As with ignition timing and other forms of engine timing, accurate valve timing, or camshaft and 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.
Setting and adjusting the camshaft timing is quite easy to accomplish in theory, but a bit more complicated as you need to determine the exact point that full-lift is achieved and the same applies to accurately determining true TDC. You then need to ensure that where these points occur matches up with the setting your manufacturer specifies on your camshaft card.
Finding True TDC
It is easiest to start setting the cam timing before you fit the cylinder head to the engine as 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 never assume that it is accurate. Always verify that TDC is marked accurately even when it appears to be accurate when viewed with the naked eye. Remember that at the piston appears to be stationary at the end of the compression stroke for approximately 10° of crankshaft rotation. TDC is at the exact middle of this dwell period and even if it is just a few degrees out, it can have a significant effect on power delivery. Start by turning the engine to the TDC mark on the crankshaft pulley and attaching the cam timing degree wheel to the crankshaft pulley. Use a piece of stiff wire affixed to a nearby bolt and bent over the degree wheel as a temporary pointer to the engine block and set the pointer to TDC or 0° on the cam timing degree wheel. Place the base of the dial gauge on the engine block with the dial indicator or stylus resting on the top of the piston and zero the dial gauge. Rotate the engine back and forth a bit to ensure that the dial gauge is correctly zeroed. Now rotate the engine to a point before TDC where the dial gauge is at 0.2 inches or 0.5mm. Either note the reading from your pointer or mark the point on the degree wheel and then turn the engine just past TDC and stop when the dial gauge is at 0.2 inches or 0.5mm after TDC. Again, note the reading from your degree wheel or mark it on the degree wheel. TDC would be the exact center point between those two readings. If that exact point is not 0° or TDC on the degree wheel, rotate the engine until you reach that exact point on the degree wheel; then loosen the degree wheel and adjust it so that your pointer is at the TDC or zero point on the degree wheel. You can also mark that point accurately on the crankshaft pulley as this will be helpful when want to check or adjust the cam timing at a later stage, with the engine fully assembled and fitted, and will be useful when you need to set your ignition timing. Then remove the dial gauge, fit the cylinder head and install the camshaft, or camshafts if it's a twin-cam cylinder head, the Vernier gear, and the camshaft timing belt or timing chain. With the engine at TDC it should be 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. In other words, the heel of the camshaft lobes for the no. 1 cylinder should be in contact with the intake and exhaust valves, and the lobes should form a "v". The engine should be completely assembled now with only the valve cover left to be attached.
Once the engine is at true TDC and you have it marked on the degree wheel and crankshaft pulley, you can remove the dial gauge and fit the cylinder head gasket and the cylinder head. Then install the camshaft, or camshafts if it's a twin-cam cylinder head, the Vernier gear, and the camshaft timing belt or timing chain. With the engine at TDC it should be at the end of the compression stroke for the no. 1 cylinder, so the camshafts should be installed with the intake and exhaust valves of the no. 1 cylinder closed. In other words, the round heel of the camshaft lobes should be in contact with the intake and exhaust valves of the no. 1 cylinder, and the toe of the lobes should form a "v". The engine should be completely assembled now with only the valve cover, the intake system and the exhaust header left to be attached.
Setting the Camshaft Timing
The camshaft manufacturer or grinder should provide you with a valve timing diagram and a chart with the specified valve lift and the exact 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. The latter is more accurate as there is also some dwell at full-left, though not nearly as much as piston has at TDC. As indicated below, we can accurately find the point of full lift in the same way as we found true TDRC. Also, the point at which the valve lift is achieved is measured in degrees of crankshaft rotation, which is why we didn't remove the cam timing degree wheel from the crankshaft. Our next step is to attach the dial gauge to the cylinder head, with the stylus on the top of the retainer cap of 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 loosen 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.
Finding Full Valve Lift
Should the camshaft manufacturer supply a chart which uses the point of full valve lift as a reference point for setting your cam timing, you would need to find the exact point of full valve lift. However, full valve lift is not one point as the camshaft also has a dwell period as they are designed to have the valve reach full life as quickly as possible and remain open for as long as possible, which is usually a good number of degrees. This can result in inaccurate cam timing as we would need the point exactly in the center of this dwell period. We can determine this point in similar way as we determined true TDC.
Start with the engine at TDC. Then turn the crankshaft until the toe of the camshaft lobe acting on the intake valve of the no. 1 cylinder is pointing more or less upward and the heel or the rounded part of the lobe is in contact with the valve, the rocker arm, or the valve lifter. The intake valve should now be 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 and stop when the intake valve starts to close and is again at 0.1 inch or 0.25 mm 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 these two marks on the degree wheel. This point should coincide with the valve timing diagram or the chart supplied by the crankshaft manufacturer. If not, you would need to loosen up the Vernier gear and adjust it as required. You should then repeat the process to ensure that the adjustment has been made correctly. On a twin-cam engine you would need to repeat this process to find the point of full lift for the exhaust valve, do the required adjustment on the Vernier gear if needed and check the accuracy of nay adjustments you may have made.