Select the move tool from the toolbar and move the dancer to the middle right like shown in the image below.

First, we’ll need to setup the layers so that we can create a posterized effect on the dancer. Duplicate the top layer with the dancer.

Click on the thumbnail of the layer mask then press the
button in the layers palette to delete the layer mask.

Choose Layer > Create Clipping Mask. This will make the current layer use the transparency from the layer below.

Finally, rasterize the layer. Right-click on the layer (not the layer thumbnail) then choose Rasterize Layer. If you are using Photoshop CS1 or older, you don’t need to do this because your layer should already be rasterized.

Now that we have the layers setup properly, we can apply the effect. Choose Image > Adjustments > Threshold. Adjust the settings to get the results that you like then click OK.

To smooth the edges, we’ll use the median filter. Choose Filter > Noise > Media and adjust the settings so that the edges are smoothed like the image below.

In the layers palette, change the blending mode of the current layer to multiply.
