I'm sure there are many ways to do this, but this is the one I use.
I find it to be quick and easy, as you can reuse it on any photo,
and it's easy to change the size.
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Step 1: Create a New Document
I made it 500 x 500px, and make sure the background is transparent.
Step 2: Add Text
Type whatever you want your watermark to say.
You can also add any sort of logo you want, as long as it is a silhouette,
as well as a copyright symbol.
Step 3: Merge Layers
Step 4: Edit Text
Add a drop shadow, and bevel/emboss.
See the pictures for the exact settings.
Change the fill to 0.
Step 5: Save It As a Pattern
Edit > Define Pattern...
Name it 'Watermark' or whatever you'd like.
Step 6: Apply It to an Image
Open the picture you want watermarked, and add a fill layer.
Choose your recently saved watermark, choose your size and click OK.
Step 7: Fade and Flatten
Set opacity to 50%.
Flatten your image.
Step 8: Some Examples
Here are some examples of some different sizes on a few of my photos.
This is my first instructable, so thank you for any and all views/comments.
Feel free to experiment with the settings and see what you like the best.
Thanks for looking, don't forget to rate!