Okay PC...actually it is not difficult to do.
I just finished mine:
It is a bit messy but okay, it is only a try to show you what you must do.
1. Open a pic of a candle. It can be simple one. I used a simple pic of a boring candle.
2. Copy the layer. Ctrl + j.
3. Select a brush and make sure the foreground color is black. Now paint over the flame because you don't want flame parts coming through your work.
4. Open a pic of water. It doesn't matter what as long as it is not a complete lake but a pic with waterdrops etc.
5. Copy it.
6. Make a selection of the part you want to be the flame instead of the original flame.
7. This is a bit tricky. You have to make fit the way you want it.
8. Use eraser tool, blending options or whatever you ant. I used no blending options but I did use the eraser tool. And I erased all parts which were not important.
9. Once you are satisfied and the waterflame is finished, you can save your work.
One note...you can also start with a new layer and fill it with the colors you want to give it a better effect. Then you can erase the background of the original candle pic.
PC and Dani, thank you but I don't know if I can be called a Photoshop master
Thanks to you too Fern and Audrey. The Frodo pic was not difficult to make. I used a pic of a car and I pasted Frodo in the mirror and I changed the opacity to 75 % and yes...he looks a bit scary in the car. Hobbits should have gone by car much earlier.