Fold the nylon strip and place your item in it to test the required length for the body of the pouch. Make sure you leave some space to pick up the item. For me 1/2" works fine but this entirely depends on the morphology of your hand so just test this.
For a very small item like a button compass, don't leave any extra space. Because the nylon is a soft material you can squeeze it out easily.
Once you are happy with the length stitch the two sides. For esthetics, do the knots in the back.
Tip: Take some spare nylon and melt a drop on top of the knots to give extra strength against material fatigue.