Photos with good contrast on colors and photos which maintain bright colors are very good for this effect. Since we are turning a photo into a watercolor canvas, we needed popping colors which bright colors could provide. If you wanted to try out this one, I suggest that you should use photos that are bright and vivid. Photos with larger dimension give a much more realistic effect.
In this tutorial, I recently shot a bright photo that its yellow flowers and blue sky are quite enough to produce a watercolor effect. I use a larger resolution to cope up with the filter values that we'll set up later.

First Step: Duplication
After opening your photo in Photoshop, duplicate it three times just like in the example:

Second Step: Hiding the 2 Duplicated Layers
Since we are focusing on a certain layer in each step, hide the last 2 duplicated layers and select the first duplicated layer, certainly, the next layer after your original photo.
Third Step: Applying Cutout filter to the 1st duplicated layer
Since we have selected the first duplicated layer, go to Filter>Artistic>Cutout. Set the values just like below.
Fourth Step: Blending Options of the first duplicate
After transforming it to Cutout, set its blending options to Luminosity.
Fifth Step: Done with the first duplicate, next is the 2nd
Since we hid the 2nd and 3rd duplicate, we will now click the "eye" button to make the 2nd duplicate visible. Now select the 2nd duplicated and go to Filter>Artistic>Dry Brush and set the values just like below.
Sixth Step: Blending options of the 2nd duplicate
After succeeding in the Dry Brush, change the blending options of the 2nd duplicate to Screen.
Sixth Step: Working now with th 3rd duplicate.
We're done with the first two duplicates, and this will be the last duplicated layer. Make it visible again, and select it afterwards. After selecting, go to Filter>Noise>Median, and set your value. I set mine into 12 pixels.
Seventh Step: Setting the Blending Options.
At last, we are done with filtering. The last thing to do is to set the 3rd duplicate's blending options into Soft Light. Now witness your final output.
This is my final output:

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