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What is the best size magnet to use that will be easily hidden yet strong enough to hold the arms on for a space marine?

I use 2mm. They work well for me.

I use 1/8" N52 strength rare earth magnets.

They fit in the torso, and conceal well under the shoulder pad.

I only magnetize a few marines - sgts, capts, special weapon guys on bikes, etc.

The 1/8 x 1/16 rare earth magnets work great.

You can buy them for cheep off eBay