Here I have mounted some 3" rough cut aluminum in the chuck. I intentionally do not push the piece all the way back in the chuck because the back side is not square or straight. I rock the piece as I tighten it to try to get it square with the jaws of the chuck. There will be some gap in the back but that it OK. We will square up everything as we go.
Face the first side until it is smooth all the way across. Flip the piece over and this time push the faced surface firmly to the rear of the chuck until it seats all the way around.
Center drill it just enough for the live center to get its tip into the hole. About 1/8th inch.
Pull the piece out of the chuck, close the jaws down to less than the size of the work piece, then hold the piece against the front of the jaws with the live center in the tail stock. It will need to be firm but not too tight. Too tight and you will warp the piece you are working on. Some people put double sided tape on the face of the chuck to get better grip on the piece.
Then making light cuts, reduce the diameter of the piece until it is smooth all the way around. Now you have a smooth front and the outside diameter is square to it.
Put the piece back into the chuck with the faced side in. Seat it firmly again. I snug my jaws down and then tap it in the center with a rubber hammer. You can put strips of aluminum softdrink can between the jaws and work if you don't want it to get scratched. For this project it does not matter. Now you can face the second side and it will be parallel to the first. This is where you make it the thickness you want. It needs to be about .125 inch less than the height of the jaws. Mine ended up at .515 inches thick. I take mine to within about .005 inch and then flip it over and take the last bit off the first side to be sure they match.
You can use this same method to make flywheels. I have made some as large as 6 inches on this lathe.