1) Go to FILE > NEW… and create a new 600px x 200px document with a white background. Check the image above if you are unsure about the settings.
2) Now let´s create the gradient for the background. In fact, this is the gradient that we will be using for the text effect. It simply looked nice as the background too. 1 – Select the Gradient tool. 2 – Click on the gradient and the gradient editor window will open.
3) 1 – Create the new gradient using the settings in image below.
2 – Click on the NEW button and give it a recognizable name.
3 – The new gradient will appear on the gradients library.
4) Select the gradient tool and then from the gradients pull down menu (1), choose the gradient we´ve just created (2). Select the ANGLE GRADIENT option (3).
5) Check the image below to see how to apply the gradient. Place the cross on the top left corner of the image and drag it to the right. It is very important to start (point 1) the gradient at the very top left corner of the image or even outside the image, but never inside the image, it won´t look good. Since we are using the ANGLE GRADIENT option, it doesn´t matter where you release the mouse (point 2) as long as you keep the line horizontal.
6) You should get a result similar to this one.
7) Now, This stage involves much more than typing a word. You will have to create a layer for each character of the word. That´s because we will be using Layer Styles. And each letter will have its own Layer Style assigned to it. Before starting, download the Disco Deck font and install it on your system. To install a font on your system follow these instructions for MAC or PC. After installing the font, select the Text tool, set 150px as the font size, and type the letter C.
8) Press CTRL + ENTER (on PCs) or COMMAND + RETURN (on MACs) to release the tool. Click again with the text tool and a new text layer will be created. Type the letter R and release the tool again by pressing CTRL + ENTER (on PCs) or COMMAND + RETURN (on MACs). Do the same over and over until you have all the five letters on a different text layer each.
9) Now we are going to arrange the letters to get the overlapped look of the final effect. That should be fairly easy. Just select the MOVE tool, check the AUTO SELECT option, and drag each letter closer to the other and overlap them as much as you want.
10) To achieve the shaded paper effect we will create a single Layer Style and will apply it to each letter. Since each letter´s shape is different from the other, we will have to change the shading effect for each one.Go to the LAYERS PALETTE and select the layer with the letter C in it. Then choose GRADIENT OVERLAY from the Layer Effects popup menu. Copy the following settings, and keep the window open. DON´T press OK yet. Remember to use the new gradient we have already created some steps before.
11) Now click on the DROP SHADOW Layer Effect and use the following settings. Keep the window open, DON´T press OK yet.
12) Click on the STYLES option on the top of the window and then click on the NEW STYLE button and give it a name. The newly created style will show last on the list of styles. Now you can press OK to close the LAYER STYLES window. Do this other layers as well.
13) Move the LAYER STYLE window until you can see the letter R. You should do this because you can only edit the gradient position of the letter R while the LAYER STYLE window is open.
14) First, type -90 in the Angle setting of the Gradient Overlay window or you can also drag the gradient angle selector until it reads -90 degrees. DON´T CLOSE THE LAYER STYLES WINDOW YET. You will see how the letter R gradient has changed its rotation and it is vertical instead of horizontal. In the next step we will move the gradient a little bit to the left to make it look better.
15) The effect is finished. Since each letter has its own Layer Style, you can change the color of the gradient to whatever you want, as long as you keep the sharp paper cut shading effect. Let´s do something simple. Create a new layer at the top of all layers. 1 – Select the last layer (the T layer in this example). 2 – Click on the ADJUSTMENT LAYER icon and select SOLID COLOR. 3 – A new colour fill layer will be created and the colour picker window will open at the same time. When you are done, close the LAYER STYLES window. Choose a colour. Any colour you want. You will be able to change it later. Click OK and the layer will be filled with that colour. You image should now look like this one.
Credits to www.photoshoproadmap.com