Step by step tutorial
Open your image in Adobe Photoshop and make sure it is on a separate layer. You can easily achieve this by duplicating layer. Right-click on your image in Layers window and press Duplicate Layer.
From the menu select: Image > Adjustments > Posterize
Adjust Level of posterize effect somewhere between 2-5, in this tutorial I chose 4.
Next we are going to adjust threshold. From the menu follow this patch: Image > Adjustments > Threshold
Pick a Threshold level which preserves most detail.
If needed use Eraser tool to get rid of the noise in the background.
Now you need to save your image as JPEG file. File > Save as. From Format selection choose JPEG, and press Save.
Done! You are ready to print your stencil.