The Magic Wand is such a simple tool that it does not even have a sub-menu. The Magic Wand makes selections by color rather than shape or outline. It is the selection tool of choice when selecting an irregularly shaped object of a fairly uniform color.
One classic application of the Magic Wand is selecting the sky in a photo; usually with the intent of swapping a dull sky out for a brighter one.
To start, open your image, and click on the Magic Wand.
Click on the sky.
When you release the mouse button, notice how the Magic Wand has selected all areas in a close color range to the area on which you clicked. But you want to increase the selection area to cover the entire sky.
To add to a selection, you can hold down the SHIFT key and click on the image again, or you can click the "Add to Selection" icon, (the two tiny overlapping blue boxes) and click on the image again. Click on the next area you want added to the selection.
When you release the mouse button, the selection will be enlarged.
SHIFT-click (or Add to Selection-click) in the next area to add.
There. I selected almost all of the sky in just three clicks. But the tiny areas of blue noticable between the tree leaves still need to be added.
SHIFT-click (or Add to Selection-click) on each small area where the sky shows between the leaves or buildings.
If you accidentially select an area you do NOT want included, ALT-click will remove it. Or click the Subtract from Selection icon, the tiny white box overlapping the blue box, then click on the color area to remove.
Here's the final selection.
If you are planning to swap out the sky, as described here, you will want to Inverse the selection. That is, switch the selection around so that everything is slected except the sky. Click Select -> Inverse.
Now notice how the selection outline of "marching ants " jumps to the house, and lower edge of the image. Click Select -> Inverse again to reselect the sky. Select -> Inverse again to jump back to the house and shubbery. (To do the sky swap, you want the house and shubbery selected.)
More on Photoshop Elements Selection Tools:
To add to a selection: SHIFT-CLICK
To subtract from a selection: ALT-CLICK
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