We'll begin this tutorial, by creating a new canvas with a size of 250 x 250 pixels. Make the foreground black, then go ahead and choose the "Ellipse Tool" and draw a circle as I have done below.
Now go ahead and grab the "Elliptical Marquee Tool" and draw a selection in the middle of the previous circle and hit delete on your keyboard. Then hit "Ctrl" + "D" on your keyboard to deselect.
You now have a nice looking ring type image as I have below.
Now that you have your circle cut, you can now right click on the rim layer and select, "Blending Options...". Now click on "Drop Shadow".
Do not click OK yet... still more to do.
Now click on "Inner Glow".
Do not click OK yet... still more to do
Now click on "Bevel and Emboss".
Do not click OK yet... still more to do
Now click on "Gradient Overlay".
- grey 747474 at 0 far left
- grey C6C7C7 at 27 2nd left
- white FFFFFF at 46 2nd right
- white FFFFFF at 100 far right
Click OK and your done
The Results!!!
You should now have the following image. All that is left to do now is add an image as I have done already, by adding the "Sea Monster" graphic that I created. Have fun with it.
Examples

