There are a few things you can do to help determine the canvas size in Photoshop. The first is to open the Image Size dialog box and select a size that is comfortable for your work. You can also use the Size drop-down list to choose a size from a range of different sizes. The second thing you can do is to use the Canvas Size tool. This tool allows you to change the size of the canvas by dragging it left or right. The size you drag will be based on how large your image is.
60 Second Photoshop Tutorial : Change Canvas Size -HD-
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