When building a composite you always have to pay attention to the direction of light. It just doesn't work if the light on the background is coming from the right but on your subject it's coming from the left. To me, it's like having the number backward on a composited athlete. You know immediately it's a fake. It's the same concept if you don't have shadows on your composited subjects with the appropriate attention paid to the amount and direction of the light.
As you may expect there are several ways to add shadows in Photoshop. The first way I learned to create these was to use the Burn tool on a new layer. This works pretty well but it takes time and a lot of practice to get it right. You're always trying to balance it with the original subject to make it look real both in shape and opacity. So I quickly learned a quicker and more effective method of both creating the shadow and then making it look realistic. Then most recently I learned yet another way to accomplish the same thing. In this article I will introduce you to these latter methods and let you decide which makes the most sense for you and your workflow.
For years I have been using the following method for creating and applying shadows when creating composites. Don't remember exactly where I discovered the method, but it was probably online somewhere. Then once learned I didn't look further for other methods because it was such an improvement over the Burn method that I thought it was golden. It's actually pretty easy and quick. First, make a selection of the subject you want to make a shadow for. The assumption here is that you are doing a composite. If that's not the case you need to create a selection of the subject with the Quick Selection tool, or whatever tool you are most comfortable with. The easy way to do to make a selection for a composite is to CMD-Click on the layer with the subject cutout. This automatically creates a selection of the subject. Once the subject is selected do a CMD-J to copy the selection to a new layer. Be sure to click on the thumbnail image. Now fill the selection with Black. This can be done several ways, but the shortcut is to first make sure your foreground color is Black. and then press CMD-Backspace. The selection is filled with black. Now move the layer below the original layer so it is behind the subject and you have your shadow layer. We will talk about how to manipulate it to look real after we discuss the second method of creating a shadow layer. Both are manipulated in the same manner.
Recently I have discovered a new method that is very popular. I'm always looking to improve my skills by viewing some You-Tube videos, and other media. Recently I was reviewing some of these for another subject matter and I saw this method of creating shadows used pretty consistently. It involves using Layer Styles. First you click on the layer with the subject. Again, I am assuming you are creating a composite or at the very least the subject is cutout on a separate layer. While on the subject layer you need to create a Layer Style. You can do this by clicking on the fx icon at the bottom of the Layer Pallet (or by using the menu and select Layer->Layer Style->Create Layer Style). Then select Drop Shadow. In the Drop Shadow definition change the Opacity to 100% and optionally changed the Distance to 200 (this pushes the shadow away from the subject) and the Size to 200 (this softens the shadow and the exact amount is optional). Close the dialog box. Now you need to move the shadow to it's own layer. You can do this by clicking on the Layer menu and selecting Layer Style->Create Layer (or right clicking on the layer and selecting Create Layer). Now you have a new layer with the drop shadow directly under the subject layer. I usually group these two layers together so if I need to move the subject the shadow stays with it.
Change the Opacity to 100% and optionally change the Distance and the Size
The only disadvantage I can see of this last method is that you soften the shadow before creating the new layer. So if you soften it too much you can't go back. In the previous method the shadow is softened after the layer is created. However, you can certainly do this with the Drop Shadow method as well. Just skip the step for changing the Size to 200. Assuming you used the first method, or skipped the step to change the Size while using the Drop Shadow method, you now need to soften the shadow. How much depends on how strong the light is and what looks real. However, first you need to move the shadow into position. If the light is behind the subject you'll need to invert the shadow so it can fall in front. To to this I use the Transform tool. While on the shadow layer press CMD-T to open the Transform tool. This will create a bounding box around the shadow. Now right click inside the bounding box and select Flip Vertical. Now that the shadow is upside down you are ready to move it into place. Move the shadow to where the top of the now inverted shadow connects with the bottom of the subject (if the light is coming from the front you can skip flipping the shadow and moving it into place). Now we want to change the perspective of the shadow. The best way I know to do this is using the Transform tool again. So once again, while on the shadow layer, press CMD-T to open the Transform tool. Now right click inside the bounding box and you have several tools to help change the perspective of the shadow. I primarily use the Distort and Skew tools initially then the Warp tool to make specific adjustments. These tools allow you to move the shadow and change it's perspective. Once you have the shadow in place and it looks natural in relation to where the light is coming from you have two more steps to complete the task.
Select "Flip Vertical" to have the shadow fall in front of the subject
If you haven't softened the shadow, or you need to change the softness, you should do that now. While on the shadow layer select the Gaussian Blur filter. Move the slider to something that looks natural. Usually something like 16 pixels is about right. This takes away a lot of the edginess that makes the shadow look fake. Finally, we know that the shadow should lose some if it's definition as it falls away from the subject. The Graduated filter does this very well. While on the shadow layer you first need to add a layer mask. Do this by clicking on the Layer Mask icon below the Layer pallet (the black box with a white circle in it), or on the menu select Layer->Layer Mask. Now make sure your foreground color is set to Black. The best way to do this is to press the D key. Doing this sets your foreground and background to their Black and White defaults. Now click on the Graduated filter in the Tool pallet and make sure Black to Transparency mask is selected in the Properties panel with 100% opacity. The opacity setting is optional, but this is where I like it. Now drag the from the point on the shadow that you want lightest to the point you want darkest to create a graduated mask. This may take a few times to get it the way you want it, but eventually you should get something that looks good. You may also want to play with the layer opacity to get it to look right.
Once all of this is finished you may still need to do some retouching to get it right. For example, the shadow layer doesn't always fit right so you may need to use the Burn and/or Dodge tool(s) on a new layer to help augment what you've done. Remember, you don't have to be perfect. As Joel Grimes says, "It just has to be good enough to sell the fake." You know it's a fake. Everybody knows it's a fake. You just need to make them wonder what is fake and what is real.
These are a couple of methods for creating shadows, but I'm sure they are not the only ones (aside from using the Burn tool). Please let me know if you have something better. I'm always looking for better ways to get it done.
Hope this was helpful. Happy shooting.
Composite of a girls volleyball team. Notice the shadows. They were all added manually using the drop shadow technique.