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Gradient Overlay is a very useful way of applying a gradient to your layer. By default its blend mode is Normal and it gives you a black to white gradient. You can reverse the direction of that gradient. You can change the style of gradient. With Align to Layer checked, if you move the layer around the gradient moves with it. If you want the gradient to combine with the colors of the layer, then use a blending mode other than Normal and/or an Opacity less than 100%.
You can change the Angle of the gradient right here and you can change the Scale from 10% up to as much as 150%. So this is just one way of applying a gradient to a layer. Another way would be applying a Gradient Fill adjustment layer. I just want to have a comparison of the two. So I'm going to come to this gradientfill document right here. I'm going to go and close the effects document we're working in without saving and then switch this to a 2-Up view where on the right-hand side we have the gradient applied as a Gradient Overlay layer effect and on the left-hand side we have the exact same gradient applied as a Gradient Fill adjustment layer.
Look at the difference in strength of the gradient! Where the gradient is applied as a Gradient Overlay layer effect, the gradient happens within the opaque pixels of the layer. So in this case within the shape of the dingbat. Where it's applied as a Gradient Fill adjustment layer the layer is happening across the whole of the canvas, so from top to bottom, we are only saying it within the shape of the dingbat and consequently the gradient appears to be less strong.
So depending on the effect that you want you may want to opt for one of these two different options for applying gradients.
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