Text can be edited in many ways.
We'll use this as our example.
The Type tools in the red box below are covered in Text On Type Tools.
Place a grid on your photograph to make it easier to layout text.
Go View > Grid.
You can adjust the spacing of the lines.
Go to Edit > Preferences > Guides & Grid (Windows) or Photoshop Elements > Preferences > Guides & Grid (Mac).
The grid is useful, but it's distracting.
The quick way to turn it on and off is to press Ctrl + ' (apostrophe).
Contrast can be one of tone or color.
Use a lighter or darker color.

Use a color opposite the color of the area in the photograph where the text is located.
Use the color wheel below.

C is cyan (blue/green).
M is magenta.
Below, the exact opposite of the green text (00A550) is pink (FF5AAF).
The maximum contrast, above, may be too much.
The background (CC3300) below has less contrast.
You can use the Eyedropper tool to select a color from the photograph.
Select the Eyedropper tool, position it over the color, and click.
You can select a color from elsewhere on your screen.
Let's say you have a website open with a good color for your text.
Do the following.
1) Select the Eyedropper tool.
2) Click and hold the cursor somewhere on your photograph.
3) Position the cursor over the website color.
4) Release the mouse button.
Go to Color Picking.
There are two ways to add shapes behind the text, outlines and the Shape tools.
To create an outline, do the following.
2) Select the Rectangular or Elliptical Marquee tool.
3) Click and hold, and drag out a rectangle or an oval.
Press and hold Shift to drag out a squares or a circle.
4) Release the mouse button.
5) If needed, go to Select > Transform Selection, to fine tune the size and shape of the selection.
a) Click, hold on a handle, the tiny square, and drag.
Make sure the cursor looks like the straight double-arrow like the one in the red box below.

The corner handles change the size of the selection without changing its shape.
Use the side handles to change the shape of the selection.
b) If you place the cursor outside the transform box, the cursor changes to the curved double-arrow like the one in the red circle below.
Click, hold, and drag, to rotate the selection.

c) To move the selection, click and hold inside the selection, and drag.
d) Click the green checkmark.
6) Go to Edit > Stroke (Outline) Selection and select the:
• Width.
• Color.
• Location on the selection.
7) Click OK.
You can create a selection from anything, of course.
Let's say you went whale watching, and have a photograph of a whale in midair.
Select the shape of the whale, outline it as described above, and place your text inside the outline.
You can use the Shape tools to place a shape behind the text.
Do the following.
1) Select the layer below the Type layer in the layers stack.
2) Change the foreground color to a different color than the text.
If you haven't already, go to Foreground & Background Colors.
3) Select a shape from the menu.
4) In options bar/Tool Options, Radius determines the roundness of any curves.
The other choices in options bar/Tool Options are self-explanatory.
5) Click, hold, and drag out out the shape.
6) If you need to:
• Modify the shape, go to Image > Transform Shape > Free Transform Shape.
• Position the shape, use the Move tool.
The Rounded Rectangle shape, with a radius of 10 px, was used above.
You can blur the area behind the text.
Do the following.
1) Select the Background copy layer, or the image layer that's under the Type layer.
2) Create a selection around the text, as described above.
(Don't do step 6, above, stop at step 5 and come back here.)
3) If you wish, go to Select > Feather, to feather the edge of the selection.
4) Go to Filter > Blur > Gaussian Blur.
5) Enter a radius value, such as 5 pixels.
6) Click OK.
If you select the text, you can replace the text color with a gradient or a photograph.
1) Select the Type layer for the text.
2) Press and hold Ctrl.
3) Click the T icon in the Type layer for the text.
The text is selected.
5) Select the Gradient tool.
6) Select a gradient from the Gradient Picker menu in options bar/Tool Options.
The spectrum gradient was used above.
7) Close the Gradient Picker menu by clicking somewhere on the screen.
8) Click at one end of the selection, drag the line to the other end, and release the mouse button.
When you press and hold Shift, the line you drag out is horizontal.
The above text was made from the eyes of the clown below.
1) Open a second photograph.
2) Select the Move tool.
3) Click and hold on the image of the second photograph in the work area, and drag it on to the thumbnail of the first photograph in the project bin/photo bin.
Below, the clown was dragged to the thumbnail of the Text photograph in the project bin/photo bin.
The second photograph is now a layer in the layer stack for the first photograph.
If you haven't already done so, go to Move a Layer.
4) Make sure the second-photograph layer is active (highlighted).
5) There are two options.
a) Select the Horizontal Type Mask tool.
b) Click where you want the text to appear.
c) Enter the text.
The text will appear as a selection.
Press and hold Ctrl, and click the T icon in the Type layer for the text.
The text is selected.
6) Position the selection of the text on the second photograph.
You need to use a selection tool to move the selection.
Do the following.
a) Select the Rectangular or Elliptical Marquee tools.
b) Make sure the New Selection icon is selected in options bar/Tool Options.
c) Click and hold inside the selection of the text, and drag.
7) Press Ctrl + j.
The text, made from the second photograph, is now on a new layer.
8) Deselect the eye icon for the second photograph layer.
9) Use the Move tool to position the text.
You can use complex grouping to create text.
Go to Clipping Masks.
You can add drop shadows to text.
Do the following.
1) Select the Type layer for the text.
2) Go to Layer > Layers Styles > Style Settings.
3) Select Drop Shadows in the Style Settings window.
4) Select the:
• Size.
• Distance.
• Opacity.
5) Click OK.
You can also experiment with Glow, Bevel, and Stroke, in the Style Settings window.
You can use filters to change the text.
When doing so, you may be prompted to simplify the Type layer.
You won't be able to edit the text in the Type layer after simplification.
Therefore, you may want to copy the layer, and apply the filter to the copy.
Go to Simplify a Layer.
Do the following.
1) Select the Type layer with the text.
2) Press Ctrl + j to copy the Type layer.
3) Go to Filters and select a filter.
4) If you're prompted to simplify the layer, click OK.
5) Enter any necessary values for the filter.
6) Click OK.
The Add Noise filter was used above.
The Emboss filter is often used with text.
Go to Filter > Stylize > Emboss.
You can distort the text.
The distortion is up-and-down and left-and-right.
You can distort in any direction using Distort, described below.
Do the following.
1) Select the Type layer with the text.
2) Select the Move tool.
3) Click, hold, and drag using one of the handles.
Initially, the text may move.
Release the mouse button, and try to distort the text again.
You can also distort by going to:
• Image > Transform > Free Transform.
• Filter > Correct Camera Distortion.
Skew
You can skew the text.
Do the following.
1) Select the Type layer with the text.
2) Go to Image > Transform > Skew.
3) Click, hold, and drag using one of the corner handles.
If you simplify the Type layer, you can use Distort and Perspective in the Image > Transform menu.
As mentioned, simplifying the Type layer will make the text un-editable.
You may want to copy it and apply Distort or perspective to the copy.
Do the following.
1) Select the Type layer with the text.
2) Go to Layer > Simplify layer.
3) Go to Image > Transform > Distort.
4) Click, hold, and drag, any handle.
Unlike using the Move tool to distort, described above, you can distort here in any direction.
Distort
Do the following.
1) Select the Type layer with the text.
2) Go to Layer > Simplify layer.
3) Go to Image > Transform > Perspective.
4) Click, hold, and drag, any corner handle.
The side becomes smaller or larger.
Below, the left side was made smaller.
Perspective
If you use a side handle, , instead of a corner handle, that side moves up-and-down.
If you simplify the Type layer, you can use the commands in the Enhance menu.
However, there isn't much there you'd want to use.
You could use it to change the color of the Type layer after the layer was simplified.
After simplification, you can't use the Type tool to change the color of the text.