Removing the Blue "X" from a file when 'Placed" onto a New Document

Hello Monika and Tom, 

the image attached was added to the new document using the followowing steps -  File<New <Place. I want to modify the image. the only way i know to begin to modify the image is by tracing it. i am curious to know if there is a more efficient way to edit the imaged placed on the new document aside from 'Image Trace'?

@Ton Frederiks clicking outside to deselect it does not allow for the image to be edited.  

@Monika Gause i want to modify the image and save as a new version of the original. 

Apologies if i am complicating the conversation

If you want to modify the linked image, select it and in the Links panel,  click the Edit in Photoshop icon, or in the Properties panel click Edit Original.