1.
On the left side of your Photoshop window you select the rounded rectangle tool. This appears when you keep pushing your mouse on the rectangle and then slide right with it. Simple as that!
2.
Now you use the rounded rectangle tool and whatever falls in this rectangle will be shown in the picture. It doesn't matter what the color is, mine is black but it could also be white.
3.
Now go to the right of your photoshop screen and you'll see the layers palette. Double click on the layer with the rounded rectangle and this screen will appear. Under "Advanced Blending" slide the bar "Fill Opacity" from 100% to 0%
4.
Now go back to the right of the screen and choose the "paths" palettes next to the layers and the channels palettes. Right click on the layer and click "Make Selection"
5.
Now you'll get this around your picture. Now go to the top of the Photoshop screen where you have "Edit". There you choose the "Copy Merged" option.
Now add a new document and go to "Edit" again and click "Paste". You should get this! It's as simple as that :). Now save it as a JPEG image and there you go. Hope it worked for you!
