How to Use the Diffuse Glow in Photoshop
Diffuse glows are used to highlight graphical elements in multi-layer Photoshop images. Photoshop handles this through the use of the Outer Glow layer style. This technique can be useful when a solid stroke around an object would be too distracting or to gradually improve the contrast of an object against a similarly colored background. It should be used sparingly around text because it can detract from readability.
Instructions
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Duplicate the layer that has the shape you want to enhance with the layer style by going to the "Layer" palette, selecting the layer that has what you want to work with and right-clicking it. A menu will come up. Select "Duplicate Layer." The reason to do this is that you can always work from a copy of the artwork. If you decide you don't like the combination of effects, it's easier to delete a copied layer than to start over completely from scratch.
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Select the duplicated layer on the Layer palette.
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Delete any extraneous color from around the outer edge of what you want to highlight by selecting the Magic Wand tool and clicking on the background elements you want to remove, followed by pressing the "Delete" key.
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Double-click on the layer's name in the Layers palette. This will pull up the "Layer Style" dialog box. On the left side of the dialog box are a number of options. The third option is "Outer Glow." It will have a check box next to it. Click the check box. If you want to change some of the parameters of the Outer Glow layer style, click on the name next to the check box. Useful things to change include increasing the number of pixels it extends, as well as changing its opacity. If the "Preview" check box on the right side of the "Layer Styles" window is filled in, you'll be able to see the results of experimentation on the screen as you work the sliders.
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