Learn how to create a Smoke Effect in Photoshop CS with Filters and Tools such as Dodge Tool, Burn Tool, Wave Effect, Smudge Tool.
Step 1 :
Open a new file by clicking on File>Open. Give a dark background color because you can not see smoke in day light much. Here we gave Black color. Create a new layer. Draw the image of the smoke with Polygonal Lasso Tool. Give a lighter color gradient to the new shape. Make sure it' s a Linear gradient. Here we have given Purple to White gradient.
Step 2 :
Select 
DodgeTool and select Range as Highlights, Brush as 18px, Exposure as 50%. Brush all the corners.
Step 3:
Go to Filter>Distort>Wave.
Select Number of generators as 4, Wavelength min 10 max 250, Amplitude min 15 max 35
Scale 100% for horizontal and vertical. Click on Randomize as much as you think that the picture looks like a smoke. Click on OK.
Step 4: Go to Edit >Fade Wave. Select Opacity as 50%. Click on OK.
Step 5: Give Opacity as 50% in the layer style on right at the top.
Step 6: Go to 
Smudge Tool and make all the edges smooth by dragging the hand in the picture.
Select Brush as 25, Mode as Normal , Strength as 50%.
Congratulations! Your smoke effect is ready.
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