The way you would normally set timing with factory cams and gears is that you would set both of the cams straight up on the notch marks in the cam cover and then have the crank pulley set at 0 on the lower cover. Everything is essentially zeroed out here, then you start the car, lock the timing with the diagnostic box, then physically move the distributor while checking with the timing light until you get the crank pulley to light up at 10 degrees advanced.
Having the cams straight up but the crank at 5 or 10° will be too advanced.