Photo Realistic Drop Shadows in Photoshop

Step 1: Add Some Type Above Your Image

My water photo is open in Photoshop, and in my Layers palette, I can see that I currently have one layer, the Background layer, which contains my image:

The first thing I'm going to do is add the type that I'll be using. Press T on your keyboard to quickly access the Type tool and add your text. I'm going to type "DEEP BLUE":

Here's my Layers palette now showing two layers - my original Background layer, and my newly added type layer above it:

You don't have to do this next step if you don't want to, but I'm going to stretch my text and make it taller by pressing Ctrl+T (Win) / Command+T (Mac) to bring up Photoshop's Free Transform box and handles around my type, and then while holding down Alt (Win) / Option (Mac), I'm going to drag the Free Transform box upward from the top center handle (circled in red in the screenshot below). By holding down Alt/Option, this tells Photoshop to stretch the type from the center, extending both the top and bottom at the same time.

With the text in place, we're going to add our drop shadow next.