Set the next layer’s parameters: Blending Options>Gradient Overlay
Gradient’s parameters:
Select now the Rectangle Tool (U) to draw the top part of the toy decoration which shape may be corrected with the Convert Point Tool.
The layer’s parameters: Blending Options>Gradient Overlay
Gradient’s parameters:
Next we shall picture out the place reserved for the thread the toy hangs up with. In this case we have to select the Ellipse Tool (U) for the operation. Place this layer lower than the previous layer on the layers’ panel:
The layer’s parameters: Fill 0% Blending Options>Stroke