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TrueCrypt allows you to create a storage area for encrypted data. This area is called a volume and is similar to other storage areas such as drives or removable disks. The difference is that it encrypts files as they are saved to it. Additionally, it unencrypts files as they are opened from the volume.
This document shows you how to create a TrueCrypt volume in a file called a container. As such, this container can be moved, copied, or deleted like other files.
From the Start menu, select All Programs » Utilities » TrueCrypt
The TrueCrypt window appears.
Click CREATE VOLUME
The TrueCrypt Volume Creation Wizard appears.
Verify that Create a file container is selected

Click NEXT
Verify that Standard TrueCrypt volume is selected

Click NEXT
The wizard window refreshes to Volume Location.
Click SELECT FILE…
The Specify Path and File Name dialog box appears.

From the Save in pull-down list, select a location for the volume
In the File name text box, type a name for the volume
HINT: You cannot encrypt a file by overwriting it with a TrueCrypt volume; the file will be replaced.

Click SAVE
You are returned to the wizard window.
Click NEXT
The wizard window refreshes to Encryption Options.
Click NEXT
The wizard window refreshes to Volume Size.
In the Volume Size text box, type the amount of file storage you want for this volume
HINT: You may not exceed the amount of indicated free space for the drive you have chosen.

Select the unit size
Click NEXT
The wizard window refreshes to Volume Password.
OPTIONAL: To make it easier to create and confirm a long password, select Display password
In the Password text box, type a password
NOTES:
Read the suggestions provided in this window.
For additional information, refer to Password Protection in the Overview document.
WARNING: Forgotten pass phrases cannot be recovered or reset.

In the Confirm text box, retype your chosen password
Click NEXT
The wizard window refreshes to Volume Format.
Within the wizard window, move your mouse randomly for at least 30 seconds
NOTES:
The duration and randomness of mouse movements enhance the quality of the encryption key as it is created.
Read the information in this window.
Click FORMAT
A dialog box appears once the volume has been created.
Click OK
You are returned to the TrueCrypt window.
Click EXIT
Before you can use this volume for storing and encrypting files, you must mount it.