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Step 1. Open Photoshop and create a new 600 x 600 pixels image, 72 pixels/inch, White background.

Step 2. Select the Custom Shape Tool >, and you try to get the Octagon Shape as shown in the picture below.

Hold the mouse and make a selection as shown

Step 3. You will notice that automatically creates its own layer.

Step4. The new layer it’s a shape layer. Shapes are vectors and Photoshop works with Raster images o pixels. The process of changing from Vector to Pixels is called Rasterizing or Simplifying.

Step 5. We need to make that happens before we proceed to change the attributes of the new octagon. Keeping the shape Layer selected, Layer > Simplify Layer if you are using Photoshop Elements. If you are using Photoshop CS3 go to Layer > Rasterize >Shape.

Step6. You can change the color of the shape by clicking the tool at the menu bar as shown.

Step 7. Duplicate the Octagon Layer by selecting Layer > Duplicate Layer

Step 8. Change the stroke of the duplicate Layer. Use Edit >Stroke, change the color to white and use 15 pixels. Click OK.

Step 9. Ctrl + T to transform and Make the duplicate layer smaller and you will get the following image.

Step 10. Finally using the Horizontal Type Tool (T) type Stop and resize it as needed.