How I do Balloons in Photoshop

 Get the text the size and location you want.

 Select the pen tool and use it to create a path around the text.

(The long curvy line should point to the pen tool in the tool menu instead of the color select box. Always great to make typos and errors in tutorials.)

 I usually get what I want with one pass, but you can fine tune the nodes on the balloon with the individual point select tool

 Right click on the path and 'make selection'

 fill the selection under the text layer with white (or other) color.

Then stroke the still present work path.

Use the pencil tool for a constant smooth line. You can experiment with different brushes, 

Try 'simulate pressure'  -I've used it.

Mainly use the pencil- It uses the current settings of the pencil tool- set that up first.