Along the left side of the dialog box is a menu with a number of effects. Adding an effect can be as simple as clicking one of the check boxes. However, the default is rarely appropriate. To access more options for the effect, you must click on its name.
Each effect has a number of settings that can be tweaked: blend mode, color, size, contour, etc. While there is no magic formula for creating a great layer style, there are some techniques you can employ to maximize your effort. Below are some tips to help you get better results from your layer styles.
Blend Modes for Better Color
The default blend modes for some of the effects are good enough, but they can often appear dull and unnatural. For example, using Multiply for a black drop shadow against a brightly colored background can result in a shadow that is abnormally gray, breaking the sense of reality. By changing the Blend Mode to Linear Burn and also reducing the opacity, the shadow will adopt more color from the background. The very same technique works well for effects that typically use Screen. Changing it to Linear Dodge will be more intense, but when the opacity is reduced you can achieve a more realistic feel.
When possible, keep absolute color values out of your layer styles. Especially with things like buttons, which can be of myriad colors, you may want to try building a layer style with relative effects. For example, if we have two simple buttons, one blue and one red, we could add a Gradient Overlay that gradates from a bright red to a dark red for the first and a bright blue to a dark blue for the second.
However, if the layers are already red and blue, then we can simply add a gradient that ramps from black to white and change the blend mode to Linear Burn. We can then reuse one layer style for buttons of any color while maintaining a consistent look.
Remember the Stacking Order
You may have noticed that sometimes an effect isn’t visible when another effect is being used. For example, a Color Overlay seems to override a Gradient Overlay. This is due to the Layer Styles stacking order. Just as with the Layer’s Palette, one layer will cover another that is lower in the stacking order. Unfortunately, the Layer Styles menu doesn’t allow you to rearrange the order of effects. One way around this (although you will sacrifice the ability to edit) is to use Create Layers, which will turn all of your Layer Style effects into actual layers that you can then move.