You can create and save a Tool Preset for any tool, which will remember settings that you choose for that tool, so you can quickly and easily select different presets and settings for a particular tool. The degree of usefulness of presets varies, depending on the tool.

You can reset any tool back to its default settings by right clicking on the Tool Presets button and select Reset Tool. Take care not to Reset All Tools, unless that is intended.

There are three options;

Shape Create a shape layer and color it.

Path Create path, which you can then easily convert into a selection.

Pixels You can apply the Freeform Pen tool directly to the pixels in the selected layer, but this will make changes directly to those pixels, which is destructive editing. Alternatively select the Path option in the Tool Mode, which you can turn into a selection, and then apply it to a Layer Mask. This option is non-destructive and permanently editable.

Select the appropriate operation.

For examples of how selections interact, see Selections Interactions.

Select options regarding Alignment and Distribution.

For more information, see Align & Distribute.

Arrange elements, by bringing forward, so they are in front of other elements, or sending back, so they are behind other elements.

Bring Shape to Front brings the shape to the front, so it is visible over all other shapes.
Bring Shape Forward brings a shape forwards, so it is in front of the next shape. It may still be behind other shapes.
Send Shape Backward Sends a shape backwards so it is behind other shapes. It may still be in front of other shapes.
Send Shape to Back Sends a shape to the back, so it is behind all other shapes.

These are some options for your preference while you work with a path.

Curve Fit This controls the cursor movement sensitivity when drawing the path. It's range is 0.5 to 10 pixels. Use a higher value to create a simpler path.

Width: The Magnetic Pen detects edges only within this specified distance (1-256 pixels) from the cursor’s center point.

Contrast: The percentage value specifies the contrast required between pixels for a certain area to be an edge. Lower contrast requires higher values (1-100 percent).

Frequency: This specifies the rate at which the Pen sets anchor points (0-100). A higher value anchors the path in place more quickly.

This option is not available while using the Freeform Pen Tool.

To make it easier to compare the different Pen tools, I will use the same image of an egg, as I did with the Pen tool guide.

The Freeform Pen tool draws freehand, unless you turn on the Magnetic option (covered below). It does smooth out some of the line you draw, depending on the Curve Fit option.

Choose whether or not to select Magnetic. I will use the tool with Magnetic turned off. Below, there are steps to explain how to use the tool with Magnetic turned on.

The Freeform Pen tool draws freehand, (unless Magnetic is turned on, covered below). It does smooth out some of the line you draw, depending on the Curve Fit option.

I will use the default values, as shown. See Path Options above for full details of the options.

Draw freehand. I have tried to be as accurate as possible.

Anchor points are added automatically.

Click on the Selection button in the Options bar.

We can clearly see this isn't perfect.

I've added a Layer Mask, to clearly show the egg against a different background.

For details see:

The previous steps 1-5 showed how to use the Freeform Pen tool without the Magnetic option. We will now look at using it with the Magnetic option.

Either tick the Magnetic checkbox on the Options bar, or within the Options panel. For more details on the options panel, see Path Options

Move the tool around the edge, being as accurate as you can. Anchor points will be added automatically, based on the options in the previous step.

You must keep the brush over the edge.

To complete the path, look for the Pen tool with the Magnetic icon.

Take it slow as you near the end, to minimize glitches in the shape.

Release the mouse button and the path will be completed

Go slowly and carefully as you near the end of the path. It's easy to get small glitches, like this one here.

The next step shows the result of this.

This is the result of not perfectly meeting up with the beginning of the path.

The completed path, with anchor points added automatically.

I tried to be as accurate as I could, but there are still some visible flaws to the path. See the next step for close-ups.

Much of the path is very good, but there are some flaws.