How to make a smooth custom shaped web icon or web graphic in Adobe Photoshop.

1.
Start by make an elliptical selection and fill it with white, then double click the shape layer in the layers panel to get to the layers style panel, and give it settings as shown below.

2.
Now we will reshape the ellipse, so go to edit -> transform -> wrap and drag out the shape so it looks like the one below

3.
Now make a new layer and name it reflection, then hold down ctrl and click the shape layer from before to load the selection, with the elliptical selection tool and selection mode called intersect with selection drag and select as shown below.

4.
Fill the selection with white color and bring down its opacity to about 60 percent.

5.
Now you can place whatever shape or symbol in between the reflection and shape layer.

I choose the fire shape from Photoshop custom shape tool, and gave the layer styles as shown below.