Step 7:

In the Volume Creation Wizard window, click Next.

Step 8:

Here you can choose an encryption algorithm and a hash algorithm for the volume. If you are not sure what to select here, you can use the default settings and click Next (for more information, see chapters Encryption Algorithms and Hash Algorithms).

Step 9:

Here we specify that we wish the size of our TrueCrypt container to be 1 megabyte. You may, of course, specify a different size. After you type the desired size in the input field (marked with a red rectangle), click Next.

Step 10:

This is one of the most important steps. Here you have to choose a good volume password.
Read carefully the information displayed in the Wizard window about what is considered a good password.

After you choose a good password, type it in the first input field. Then re-type it in the input field below the first one and click Next.

Note: The button Next will be disabled until passwords in both input fields are the same.