My brother was doing some work in his Graphics class when he sent me a picture that he had made on the computer. It looked really good, so when I got home I asked him how to make it:
Make your background black with the Paint bucket tool. This can be found by right clicking the Gradient Tool and changing it to paint bucket. You then go to Filter, Render, Lens Flare. You insert this in any way you want, i've used the Movie Prime Lens Flare. You then go back to Filter and click Sketch, Chrome and change the slide bars to your digression. Then press Control + J. This will copy the layer. Go to the layer options and change the layer's settings to SCREEN. Then go up to Filter and press Distort, Wave, Randomize. Then continue the process of Control + J, Distort, Wave. Do this until you have a picture you're content with. Then you go to the paint brush tool, keep it on the faded edge and put it to about 800 px. Then change the brush setting from Normal to Color. Change the color of your brush to whatever you want, and start coloring in each layer. Remember, the background layer is the MASTER LAYER, so make it a nice color for a good end result.
I gave it a shot myself and ended up with this:

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