Get the Horizontal Type tool (T), click it somewhere within your image, and just start typing. You can choose your font and point size up in the Options Bar (when you start typing, it uses the last font and size you used. So, if you want to change your text font, just highlight it first, then choose a new font from the pop-up menu). If you really want to access some serious type features, go under the Window menu and choose Character to bring up a panel with a ton of type controls (baseline shift, superscript, kerning, Open Type features, etc. Now, if all of that sounds like, “Huh?” you can probably skip opening this panel). When you start typing, it types in one long line, so you have to put in your own line breaks by hitting the Return (PC: Enter) key before your text goes past the edge of your image. If you know you want your text to fit in a particular area, even before you start typing, then take the Horizontal Type tool and click-and-drag out a text box with the amount of space you want. Now, as you type, your text will automatically wrap to the next line (like you’re working in a regular text app).
Once your type is in place, easily change its size by getting the Move tool from the Toolbox, then pressing Command-T (PC: Ctrl-T) to bring up Free Transform (it puts handles and a box around your type). Press-and-hold the Shift key (if you want to keep it proportional), grab a corner handle, and drag inward (to shrink your text) or outward (to make it larger). When you’re done, press the Return (PC: Enter) key to lock in your transformation.
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