Create a Dreamy Photo Effect with Photoshop Elements

Click in the top left corner of your picture and drag to the lower right corner to create the shape, but leave some extra space around all edges of the photo. Then click the "Simplify" button on the options bar. This will convert the shape from a vector object into pixels. Vector objects are great when you want a crisp, clean edge, but we need a soft edge, and we can only run the blur filter on a pixel layer.