We will begin with a blank canvas of 400x400px, with a black background. Then create a big circle selection with the Elliptical Marquee tool, and with White chosen as the foreground color, right-click the selection and choose Stroke. I did 3px, Center:
Now, duplicate this layuer by right-clicking it in the Layer window and clicking Duplicate Layer. Hide the top layer and go back to the original. Goto Filters > Stylize > Wind. For the options, choose Wind and From the Right:
Repeat this filter as many times as you like, by pressing Ctrl+F. You may find you need to move the circle more-over to the right of the canvas as to not cut off the top of the wind strokes. I applied the filter twice:
Now goto Edit > Transform > Rotate, and rotate it 90° Clockwise so it is the right way up (Tip: Hold Shift while rotating to rotate in set increments). Then Ctrl-click the original layer with the circle still on it to make a selection of it, and choose the Move tool. Now click on the following align buttons (with the wind layer selected) on the Move toolbar to re-align the two layers:
With all layers now visible, we should have something like this:
Next, we want to make the flames more realistic. Two ways to do this are: 1, use the Liquify and Blur filters, or 2, use the Blur tool. We will cover the Blur tool - go ahead and choose the Blur tool from the toolbox. Choose a soft brush and a Strength of 50%. Now use this brush to go around the circle, smudging and bending the flames slightly:
Once completed, we should have something like this:
Now let's add some color. Goto Image > Adjustments > Hue/Saturation. Experiment with the sliders, and make sure the Colorize check box is checked, to get the color of flames you desire:
Now duplicate this layer and experiment with the top layer's blending mode. This is Color Burn:
Finally, duplicate the original layer (the white circle) and move it to the top of the composition. Add an Outer Glow layer style to it and use Filter > Blur > Gaussian blur to make it look like this:
And as always, please experiment with PhotoShop to get the best results.