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1.Type your text using the
colour you prefer. The font used in this tutorial is called Dom Casual BT...
some other fonts that may work well include (but are not limited to)
Arial Rounded MT Bold, Challenge Extra Bold, Comic Sans MS,
and Good Dog Plain. Choose Layer-> Rasterizing-> Type, then CTRL+Click on
the layer to get a selection around the text.
2.Now, make a new layer above the the one with your
text. Go to Select-> Modify-> Contract and choose a setting of about 5 (this
may vary depending on the size and "fatness" of the font you are using).
Choose a lighter shade of your text's colour and press ALT+Delete to fill the
selection. Press CTRL+D to deselect.
3.Next, go to Filter-> Blur-> Gaussian Blur and
choose a setting of about 2.0 (again, this will vary depending on the
size/fatness of your font).

4.Now that we have the basics out of the way, it's
time to add some nifty Layer Styles to pull everything together. Select the
original text layer and choose Layer-> Layer Style-> Bevel and Emboss. In
the Bevel and Emboss menu, use the following settings, or if you prefer,
click on the thumbnail image below to see a screenshot of the menu settings:
Style: Inner Bevel
Technique: Smooth
Depth: 61%
Direction: Up
Size: 8
Smooth: 0
Use Global: unchecked
Altitude: 30
Gloss Contour: Rolling Slope
Highlight: Screen with 100%
Shadow: Multiply with 100%
5.Once you have
those settings entered, simply select the Drop Shadow and Inner Shadow layer
style options, leaving them with default settings (or of course you can play
with the settings to achieve the effect you are looking for).
You now have some very cool looking "Gel Text" =)
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