Open up the document Graffiti Tutorial.psd and add a new group folder labelled ‘Graffiti 1’. Next, download the project files from here, and open the graffiti photos (Graffiti_1.jpg to Graffiti_16.jpg). Now use either the Magic Wand tool (W) or the Color Range (Select > Color Range) selection techniques to generate selections from the images and copy and paste these into your folder as new layers.
Continue adding layers, remembering to leave areas clear for the skater stencil and mural. Experiment with different blending modes: for this image I’ve used a combination of blending modes. Try filling selections with paler colours and dropping the opacity for a weathered look. You can also blend layers by double-clicking their thumbnails and dragging the whitepoint Blend If slider to the left (hitting Opt/Alt and dragging to split the slider will refine the blend).
Open Skater.jpg from the project files and crop the excess background. Now use the Pen tool (set to Paths) to isolate the skater. You don’t have to be 100% accurate plotting your points here because the final stencil result is fairly crude. When you’re done, save the path by double clicking its thumbnail.