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(Click on any image to view a larger version; or, Control-click/right-click and open in another window or tab)
Start with a new document and fill it with whatever background color you wish. I've chosen this reddish orange.
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Now, go to Edit>Paste into and your photo will appear inside the circular selection that you made earlier. When you paste anything into a Photoshop file, Photoshop creates a new layer directly on top of the layer that was active when you initiated the Paste action. When you Paste Into a selection, Photoshop also automatically creates a Layer Mask in the shape of your selection. Of course, your selection can be any shape you want, and Photoshop will create a mask in that shape. Nifty, no?
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In the Layers palette, we now see a thumbnail for the photo, as well as a black and white thumbnail for the layer mask. Note that the entire photo is actually there, but the layer mask is only showing us the part that is revealed by the white area of the mask. We can now resize the image, or move it around behind the mask, which gives us much more flexibility than if we had simply copied a circular selection of pixels and pasted them in.
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Now, let's suppose we want to create a second circular image that's the same size as the first one. To do this, we need to copy the original circular selection that was used to create the original layer mask.
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To do this, Control-click on the layer mask thumbnail in the Layers palette. This loads the mask as a selection. Using the Marquis tool (press M), we can now go back to our image and click inside the circular selection and drag it to a new location. By using the Marquis tool, we are assured of only moving the selection, and not the image inside the selection.
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We can now paste a second image into this new selection (open a new photo, select all, copy, return to the destination image, paste into) and Photoshop will create another new layer, complete with a new layer mask. Easy!
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If you want to move your circular frames around, you need to lock the image and its corresponding layer mask. Do this by click the space between the image thumbnail and the layer mask thumbnail; a small chain link will appear, signifying that they are now locked. You can now use the Move tool (press V) to click and drag the circles around; both the image and the mask will move. When the image and its mask are locked, you can also resize both simultaneously (Command/Control-T). To unlock the image from its mask, just click on the little chain link and you can then transform them independent of one another.
Layer masks are powerful tools, and I've just scratched the surface of what you can do with them. They are an essential tool for compositing images, and well worth your time exploring. Have fun!
thank you! seems like a pretty basic task but i couldn't figure it out lol
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