Ok then, Here is what you have to do in Photoshop. 
First, open your picture in photoshop and create a new layer above (select the background from 'layer' window and press Ctrl+Shift+N & then hit Ok 
choose Pen tool from the toolbar

and hit the places of the red dots according to the numeric order and

at last click on No:1 dot again to close the shape.
Now you'll have a shape like this,

Then select Convert Point tool.

Click & drag the mouce pointer on the points of the shape to make the lines curve. (you can use your original image as a semi transparent background to make the curves easy and fit the original. 
After that you'll see a flame shape like this one.

So that's it in creating. Now all you have to add new layers, effects, gradients and blending options to look the flame in to your desire. 
And here is my design 
