When using shape tool, I want to skew rectangles but everytime I do so I loose significant quality and the edges become pixilated. I've tried converting it to a smart object as well but to no avail. There has to be a way to skew retangles and shapes without loosing quality I know I'm not doing something right.
In a pixel based image (Photoshop is a pixel based editor) any line has to be drawn in minimum units of single pixels. That applies whether using brushes or using vector shapes. They are all viewed as pixels on the canvas.
There are two ways to do this with diagonal lines, one is to have distinct stepping which looks like a staircase, the other is to have anti-aliased lines where some pixels are shaded to try and hide that stepping effect (that is shown in your image). The only way to reduce the visibility further is to increase the pixel count in the image so that each step is smaller, as is the antialiasing.
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