Start with an appropriate font. Here I used Tag Extreme. Download it here.
Right click on the name on the layers pallett and select "rasterize type"

Step 2
Create a new custom blend similar to this.

Step 3
Ctrl/Cmd click on the layer to select it.
With the gradient tool set to linear draw the blend by dragging the gradient tool from top to bottom.


Step 4
Don't deselect.
Create a new layer
Edit>stroke
Add a 2 pixel gray stroke to the "outside"

Step 5
Filters>blur>gaussian blur
Add a .08 gassian blur to the new layer with the outline on it.

Step 6
Merge the outline area with the graffiti layer by clicking Ctrl/Cmd+E or select "merge down"

Step 7
Select the layer again. Cmd/Ctrl+Click on the layer thumbnail.
Add another stroke, this time make it black and put it right on the graffiti layer.

Step 8
Looking good! Now for the shadow.
Duplicate the layer by dragging it to the new layer icon on the layers pallette.
Select the new layer and Fill with black.


Step 9
Drag the black layer behind the graffiti layer and move down and to the left a little bit.

Step 10
Here I added a background and changed the layer blending mode of the graffiti to Hard light. See how it blends nicely to the background like it was painted on.
Download the PSD|Download the layerstyle

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