Mount the stand somewhere on the hub/rotor. Dial gauge on the end of the axle. Don't spin anything. Pull on the rotor/hub, adjusting the axle nut until you get just .0005" (actually .0004-.0008") movement on the indicator. (Approx half way between zero and the first index marking.)

In simple terms, you want to adjust the axle nut to allow a very slight amount of axial movement.

It might be interesting to check your original adjustment before you loosen the nut.