You want the circumference of the wheel, the distance around the middle of the tire. I made a chalk mark on the pavement and wheel and rode the bike across my parking lot through 5 complete rotations...about 30 feet. I measured the distance and divided by 5. Or you could just roll one rotation and measure with a yard stick. Whatever distance you get will probably need to be converted to millimeters. Use google..."convert 40 inches to millimeters"
Where you mount it on the wheel doesn't matter, one rotation is one rotation. Since it won't stick to the aluminum rim without glue, I just put it on the steel disc.
You could epoxy the sensor in place and hide the wire if you want a neat job. I was in a hurry.