Of course there is an easier way to do it and that is by clipping the texture layer to the horse layer. The easiest way is just to do it and see it in action. Hold the Alt key and click once between two layers. The upper layer will be visible only through the pixels of the lower layer – in other words the upper texture layer will only be visible through the lower horse layer. This is how you clip layers. You can have more than one clipped layers – for example you can have a four texture layers clipped to the horse layer and they will all show through the visible pixels of the clipped layer. So from now on you should at least know (and hopefully understand) how to clip layers: simply Alt-click between two layers in order to clip the upper layer to the lower layer in the layer pallet.
Now back to our scene. Clip the color layer to the island layer and change the blending mode of the color layer to Color. Notice how the island suddenly looks very well blended into the scene. If you wanted to retain some of the original color you could simply lower the opacity of the color layer but in our case this is just what we need.
Another very important thing in creating photo manipulations is light direction and shading. Before apply any light and shade to our object it is important to establish the light direction. In our case the light is coming from the middle/lower right portion of the scene. Now it’s time to apply some shading to our island to make it look less flat. Create a new layer and set the blending mode to overlay (a good blending mode for altering the lightness of an object without affecting the colors very much). Clip the layer to the island layer and with a soft round white brush at 30-40% Opacity paint a little on the lower right part of the island. Change the color of the brush to black and paint a little in the upper left part of the island. If you have a tablet this will be even easier but you can also do it fairly well with a mouse. You should have something like the image below.
Open file “Castle”. Using the pen tool or the quick selection tool select the castle. Copy it and paste it into our scene. Convert the castle layer to Smart Object and resize it like shown below.
Add a layer mask to the Castle layer (Layer > Layer Mask> Reveal All). In the layer mask use a round soft black brush to mask the lower portions of the castle so that it integrates nicely with the island.
Layer Mask quick explanation. Layer mask are one of the most important concepts to understand in order to use Photoshop efficiently. There are plenty of tutorials on internet regarding layer masks but here’s the quick version. Let’s say you have a photo and you set it on a table. This is the layer. Now over the picture you put a transparent paper or foil. This is the layer mask. If you draw with a black marker over the transparent paper you will not see the picture under the black paint. If you erase the black paint you will see the picture. This is painting with black and white in the layer mask.
All this time the photo is unharmed – if you remove the transparent paper the photo is intact below. This allows for a great flexibility when doing any image editing in Photoshop.