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Water Text Effect

 Open a new document with a white background. (size 500 x 500 pixels)

Next go to Layer / New / Layer

Next select a white swatch and then with your type tool write something. choose a big font ,with the size of 90.

Next go to Layer / Layer Style / Gradient Overlay and apply these settings.

Water Text Effect

Next click on the gradient bar and set it to this.
Water Text Effect

Next go to Layer / Layer Style / Bevel and set to this.

Water Text Effect

Next go to Layer / Layer Style / Inner Glow and set to this.

Water Text Effect
Next Layer / Layer Style / Outer Glow and these settings.

Water Text Effect

You now need to merge all layers by pressing Ctrl+E.

Next go to Filter / Distort / Ocean Ripple and set to this.

Water Text Effect

Now you need to duplicate this image by right clicking on the top of the image window a menu will appear, click on duplicate.

Now go to Filter / Distort / Ocean Ripple and set to this.

Water Text Effect

Next go to Image / Rotate Canvas / Flip Canvas Vertical

Next got to Layer / Layer Style / Gradient Overlay and click on the gradient bar and set to this.

Water Text Effect

You should now have a image that looks like this.

Water Text Effect

Now crop this image.(you will need to crop of 2-3 pixels into the text at the top so it joins to the other text properly)

You now need to save this image to a folder.

Next click back on your original image and then go to File / Place and click on the image you just saved this will now open in your image, align to the other text then right click on the image a menu will appear and click place. Now press Ctrl+E to merge and your finished and should have a image that looks like this.

Water Text Effect

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