Okay – firstly, the hand should be on the bottom layer with the crab shell on top. Drop the opacity of the shell so you can see to position it where you want the burns to be. Also use Free Transform (Ctrl + T) to enlarge or decrease the size according to what you want.

As you can see, I’m also including a bit of the wood grain on the arm. Now – Bring the opacity back up to 100%. Time to pick a blend mode.
If you’re unsure what blend modes are, what they each do, or which one to pick; I wrote a tutorial on this a while back – Found Here: Blend Modes Tutorial
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