Step 1.
Create a new document
5x5x300dpi

Step 3.select a font
this is "Silvus"
200 points

Step 4.position in center by dragging edge with cursor

Step 5.create a new layer by clicking on icon at bottom of layers palette (see diagram)

Step 6.Click on the top layer in your layers palette.
Then click on "Edit" in the top menu
Drop down to "Stroke"

Step 7.choose 1 pixel, Black, stroke inside
(if you want bolder outlines
you can choose more pixels for a broader outline)

Step 8.Deselect to get rid of the "marching ants"

Step 9.Drag layer over the layer icon to duplicate the layer

Step 10.Now you have an outline to colorand an outline that is on top of that.
label the bottom layer "color" by clicking on it, then you won't get confused

Step 11.Choose a color to start with;
click on the top color box in the tool box to the left and choose a color in the palette that pops up

Step 12.I chose a dark red. It shows up in the color square in your tool box

Step 13.click on the "color" layer before you begin to color your letter

Step 14.click on the "paint bucket" tool in your tool palette
See the options across the top menu? Duplicate mine.

Step 15.Start coloring by clicking in the spaces that you want
to color with your chosen color.
Be sure and click on the spaces in between and NOT on the black outline

Step 16.Use the zoom tool to enlarge your work so that you can work in the detail

Step 17.For the tiny places use a brush tool in a small size (see diagram)

Step 18.Change to a different color when you're ready.
You can click on the double arrow to move the foreground color to the back so you won't lose it if you need to use it again

Step 19.continue to color, change colors, and tools, until you're done.

Step 20.If you make a mistake you can always undo or step backward using the option under the "edit" menu

Step 21.Zoom out to see what you've got. You can stop here or continue
to create a border.

Step 22.create another new layer; choose the rectangular marquee tool in your tool box

Step 23.working on the top layer, drag a rectangle around your letter;
stroke with the width and color of your choice

Step 24.You can "edit/undo" if you are not happy with the size of your outline and change color or size

Step 25.You can continue with a band of different colored outlines by changing colors in your tool box and choosing "Stroke" in various widths.

Step 26.This letter is outlined in gold, teal and black. You can stop here or fill in your box with a different background color.

Step 27.choose a color for the background; select the paint bucket tool; be sure you are working on the layer with the stroked rectangle; click in the interior space to fill it in

Step 28.Don't like the color?Choose another color and click over the old color with the paint bucket tool to change it.

Step 29. When you are happy with your letter, change the image size to suit your needs.
This finished letter will be 1"x1"x300

Step 30. Click the "eye" icon on the background layer to make it invisible, then "merge visible"

Step 31.You can slide this letter onto another Photoshop page with your text to create the finished page. or you can "flatten image" and crop the white off and use it as a graphic in a word document.