Step three:

In a new layer draw a #262626 circle. (width: 48 x height: 48)

Add the following layer styles: Inner Shadow, Stroke.



Step four:

Once again make a new layer and draw a #FFFFFF circle covering the rest of the circle. (width: 105 x height: 105)

Add the following layer styles: Outer Glow, Stroke.

Set layer's blending mode to Darken.