I have a watch makers demagnitizer sitting by my bench. I will be doing the file work on a blade and see the steel shards sticking out like fuzz. I give it a run through the coil and the steel particles fall on the floor. I also demagnitize all blades after sanding because I use magnetic clamps and have magnets sitting on the grinder bench to catch stray steel dust.
You want the loop style, and not the flat type. They should run about $50-60 new and $20-30 used.
You can build one easily,too. A coil from a transformer or even a motor winding can be converted to a demagnitizer. I know of one made from a motor winding with a piece of PVC pipe inside and outside, and PVC flange fittings on the ends. This completely encased the winding to prevent any possible electrocutions.It is much larger than a watch makers unit.
The winding coil was wired with a push button, a power switch, a red light (Demagnitizing) and a green light ( power on), and a power cord. I'll leave the details of how to build one for your research, but it is as simple as connecting all the parts in series.The only parallel part is the green light.
In my opinion, a demagnitizer is a nearly essential tool for any detailed knife making work.