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Sean from Tracker Software demonstrates how to add watermarks to documents using PDF Exchange Editor. Watermarks serve to protect documents, indicate ownership, and deter counterfeiting. They can be added as text or image. To add a watermark, go to the organize tab, select watermarks, and click add. You can create the watermark using an image file or custom text. Customize the font, alignment, and use macros for dynamic content. Preview the watermark before applying it.