I haven't heard of that tradition as well. I have a friend who used individual slices of cake to form the numerical "four". She didn't do it because of any cultural or traditional beliefs but was just trying to be creative. She only used one candle for that cake as a gesture (but come to think of it, her boy had more than one cake since there were many celebrations with different groups. For other cakes, she did use four candles I think. ;p).
Never heard of this superstition/tradition though. Normally I will just put the actual age unless I celebrate the Chinese Birthday which is rare. I believe all these depends on the individual parents and also if there are old folk around, they may give you different advises as well. Most importantly, the kid must be healthy.
I haven't heard of this superstition. Maybe it's specific to your culture. But if 4 separate candles seem unlucky to you, you can get one of those candles shaped in a specific number. That way, it'll be one singular candle but accurate to your child's age. You can get those candles at the bakery or a party supply store.
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It's nice to meet someone else who also has heard of this tradition! This was the case in my family while growing up. Not sure why we did it, but I don't follow it for my child. :)