I'm trying to figure out how to perfectly blend color layers in photoshop. I want to blend the layers while maintaining the original saturation. The closest I've been able to get is by altering the opacity (shown below). When I do this, however, the image (magenta layer @ 50%) loses its saturation and looks faded compared with the 100% opacity yellow layer. This makes the red section where they blend look similarly faded. Is there a way to blend (100%) without sacrificing the saturation of the original image?
Set the blend mode of the magenta layer from 'Normal' to 'Multiply' and its opacity back to 100%. This will cause the colour values of both layers to be added together, resulting in a bright red. You can find blend modes in the Layers palette, right next to the Opacity.
Do note that blend modes work differently depending on your document's colour mode (Image > Mode...). You will achieve the desired result in RGB mode, but CMYK may differ greatly.
Another method that may be of interest to more advanced users would be through channel activation/de-activation.
In CMYK if you have a layer 100% Yellow and another layer 100% Magenta on top of it you could go into the Blending options of the Magenta layer and deactivate the Yellow Channel for perfect mixing.
Likewise if the Yellow was on top you could turn off the Magenta channel from that one.
It will depend on the exact use case to determine if its better to use Multiply or Channels in any specific situation so its good to know both tools are available to you.