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Sean from Tracker Software explains how to add watermarks to documents using PDF Exchange Editor. Watermarks have various purposes such as protecting documents, indicating ownership, and deterring counterfeiting. They can be added as text or image. To add a watermark, go to the organize tab, select the watermarks drop down menu, and click add. In the dialog box, choose between using an image file or custom text for the watermark. Customize the text, font, alignment, and use macros for additional options.