The Smudge Tool in Photoshop 7 has often been mischievously used to distort images of people, and I was such a culprit. However, the Smudge Tool can also be used to create a glowing energy kind of special effect, and I will share the method with you in this short tutorial.
If you have read some of my articles, you will notice that I emphasize "Photoshop basics" and ditch "trendwhorish effects". Why, then, would I write an article on special effects?
The fact is I still think basics are very important, and one should master the basic skills in Photoshop before trying to more advanced imagery. This is the exact opposite of what most Photoshop beginners do; most of the beginners are seduced by the special effects that Photoshop can produce and seem to have a passion for drinking in these effects.
I am actually trying to get the point across; if you have at least read my Selection Booleans or Light Study tutorials, you have mastered a little basics. I don't know about you, but I have received mail from a couple of readers saying that my tutorials have inspired them to explore new frontiers.
Now is the time I offer my readers some special effects, after eight boring "basics" lessons.
OK, I have ranted enough. Let us go to the lessons itself.
... with a new document with a black background. Next, make a new layer above the black background layer. Then, using a hard-edged brush, paint a splat on the new layer.

Note: stay away from using fully saturated colours: Red, Blue and Green.

Now, select the Smudge Tool with 100% Strength in Normal Mode and select a soft edged brush tip. Then, from the black part of the image, drag the Smudge Tool into the shape.
When you are done, release the mouse but don't move your mouse! Then, click and drag the Smudge Tool from the initial position away from the shape.

You should get something like the image up there.
Repeat the above procedure for a few times until you get this:

When you are satisfied, press CTRL + E on the keyboard to merge the layer with the background. Then, press CTRL + I or go to Image > Adjustments > Invert to invert the colours.

Then, go to Filter > Stylize > Glowing Edges. We're nearly done...

To enhance to "glow" effect, copy the new layer by dragging the Background layer onto the "New layer" icon in the Layer Palette. This creates a duplicate of the background layer.

On the new layer, apply a Gaussian Blur by going to Filter > Blur > Gaussian Blur. Then, change the blend mode to Screen and you're done.

As a reminder, please chant "this is only an example" ten times. OK, what I want to say is this is only a simple example of what you can do with Photoshop, equipped with a little creativity and lots of trial and error. To be able to do that, reinforce your Photoshop basics!
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