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Noise, of course, is the speckly stuff that can appear in your image, especially when you're shooting at high ISO and usually there's more noise in your shadows than your other areas. Noise reduction is grouped here into the Detail tab in Camera Raw alongside sharpening. And in most image editing applications you'll find noise reduction and sharpening grouped together, because there are operations that you typically want to perform at the same time. The reason being, noise reduction usually has a softening effect on your image because the way noise is reduced is to apply very purposeful localized blurs to your image.
Also sharpening can exaggerate noise, so you want to be balancing your sharpening efforts with your noise reduction efforts. I am not actually going to spend much time on noise reduction in this course, because these days if you're working with a new camera you're probably not facing a lot of bad noise issues. Today's SLRs and even today's higher-end point and shoot cameras do a fantastic job of managing noise. If you would like to know more about noise reduction and see some more advanced examples of it, checkout my Foundations of Photography Low Light course where in we take a deep look at noise.
For the sake of this discussion I am just going to leave it at this noise reduction, if your image needs it, would be performed right now in Camera Raw at the same time that I'm doing my input sharpening step. If you're working with JPEG then you would need perform noise reduction later in your workflow. Usually you would probably want to try your noise reduction right at the beginning of your process, because if it doesn't work you would probably abandon the image, and for that you would use the noise reduction filters in Photoshop or even go to a third party noise reduction plug-in.
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