Stencil Text Effect

2. Duplicate the text layer, and rasterize the new layer by right clicking on the layer and selecting rasterize layer. Now move the new layer below the text layer, in the layers window.

3. Now Gaussian Blur the new layer by a small amount (I used 5px), so that there is a gentle glow around the text. Then select the eraser tool and select a small brush (about the same width as the text). Now start to erase areas of the glow. Imagine you were spraying from the top, so the top edges will be sharp and the edges below will be blurred. Also where two edges are close together there could be blur.

4. Now select the airbrush tool and using a small brush add some extra blur to certain areas on the bottom edge. Experiment with different brush sizes and types for different effects.

5. Now create a new layer. Then hold down shift and left click on the original text layer to load its selection. Now expand the selected shape by going to Select > Modify > Expand. I expanded mine by 20, you want the selection to surround the shape at a distance. Now invert that selection, Select > Inverse.

Select the airbrush tool and use a large brush to add slight areas of paint around the edge of the stencil.

Finished. Looks best with stencil style fonts, you can also change the amount of blur by changing the layer transparencies, or by duplicating the blurred layer.