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If I add a gradient effect to type in photoshop is it possible to add a blending mode to it as well so that it interacts with the photograph in the background? I have tried to apply multiply blending mode to the layer. I am thinking that the only way for it to affect it is to rasterise the text?

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You can set a blending mode for the Gradient Overlay...

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If the desire is to have the Gradient Overlay be the only color of the type,
you'll want to set the Fill Opacity of the Type Layer to 0 (zero) in
the Blending Options for the layer or via the Layers Panel.

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Fill Opacity effects only the actual pixels on a layer...
where as Opacity effects the pixels on a layer and any layer styles associated with that layer.

2

Another possibility is to right click the text layer, and convert it to a Smart Object. This avoids the need to rasterize the text.

Then you can apply a Blending mode to the Smart Object Layer.

If you need to edit the text, double click the Smart Object in the Layers panel. It will open the Smart object for editing, then finally and close the Smart Object.

Example

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2

About interaction:

This was not asked, but inserting a blending mode to the colored text will not make it look like it's painted on the wall. More plausible result can be got with 3 additional tricks:

  1. Perfect clean edges should be distorted to match the apparent roughness of the wall material.

  2. The paint layer must also have some apparent depth. It either must have some apparent thickness or it should follow the bumps and dimples of the concrete. Both of them are possible simultaneously.

  3. The text must have same perspective as the wall.

You can start by inserting an ordinary text object:

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Do not rasterize it, make with it a selection by clicking the text icon in the layers panel and holding the Ctrl key at the same time. Fill the selection with the wanted color in a new layer:

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I suggest here destructive effects. For that reason keep the original text just in case you make an error.

If the new layer has a blending mode other than Normal it can have to some degree the same brightness variations as the surface:

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Unfortunately it looks inserted, because nobody can paint so perfect clean edges on concrete and all surface bumps and dimples should be more visible in the paint.

One method to distort the edges is to use the concrete texture as a displacement map. It's useful to make a version which has average brightness = about 50%. Then the displacement map doesn't move the whole text, it stays averagely in the original place. The new version can be made with curves. It's this:

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The wall copy layer (darkened with curves) was saved separately. In the next image it's used as a displacement map for layer Rasterized Text:

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The colored text has blending mode = normal, so the concrete texture cannot be seen through in this phase.

The text needs some shading to look lying on the rough concrete. Make a selection by Ctrl+clicking the Rasterized Text image icon in the layers panel. Copy a piece of the concrete texture with that selection and paste it to a new top layer. Apply Filter > Stylize > Emboss to get apparent bumps and ditches. Let the light point downwards to get mostly dimples

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Emboss leaves the result averagely to 50% grey, so it can well have blending mode Hard Light to transfer the apparent bumps and dimples to the underlying image:

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You can reduce the effect by reducing the opacity of the embossed concrete. Here the opacity is full.

One optional trick is left: The paint has often some apparent thickness. Embossing presented above creates a little of it, but the bottom horizontal edges collect easily more paint. The illusion of extra thickness can be got by inserting layer style Bevel&Emboss to the rasterized text layer:

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Experiment with the settings. It's easy to make it too thick.

Perspective: You must start by applying perspective transformation to the rasterized text and add the rest of the effects later. Your wall is quite near of straight on the face, so omitting the perspective probably doesn't cause much harm.

0

That seems like an odd behaviour to me. Never came across this issue.

I usually use clipping masks to apply gradients to layers. (hold 'alt' and click between two layers).

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