I wasn't even going to read this because I figured this was well known stuff but nobody has even posted a correct way let alone the best way.
So here goes.
Rotate the engine until the #1 exhaust valve (or whichever intake you want to set) is starting to open. Set the #1 intake valve.
Rotate the engine until the #1 intake valve (or whichever exhaust you want to set) is about to close. Set the #1 exhaust valve.
Then you can move to the next cylinder's valves.
The beauty of this method is that it works on any 4 stroke cycle engine. It doesn't matter how many cylinders, how they are arranged, how they are numbered, what the firing order is, how big or small your camshaft is, any type of lifter, you don't have to have the balancer marked - it works on all of them.
You can start with any cylinder. You can go through the firing order. You can go down one bank of a V8 then the other. You can set all the intakes first, then the exhausts. It doesn't matter. All you have to do is know when you've done them all.
This method assures that when you set the valve, the lifter is on the base circle.
Setting them at TDC does NOT do that! So that method is incorrect.
As far as cold and hot, you have to set them cold the first time to be able to start the engine. Depending on your head (cast iron or aluminum) and valve train, the lash can either close up or grow when the engine warms up. Once you've done a certain setup cold and hot, you can estimate where to set them cold to get the right lash when hot. Then all you have to do is set them cold, and a quick check when hot.
This method is one I've used for almost 40 years and has served me well, and always will.