Creating fixed buffer around a selected point in QGIS version 2.18.2

You need to go to

Processing > Options... > General

And check the Use only selected features option.

Just select the points and internally the selected points will be buffered.

Here is the output:

Only the selected features will be buffered.

If nothing is selected everything is buffered.

This changed in QGIS 2.18 where processing is now used for the vector tools, so the FWtools was removed: http://www.northrivergeographic.com/archives/geoprocessing-qgis-2-14-vs-2-16