Collect as many glass bottles as you can. Wine bottles work perfectly, but you can use any size or shape. You can use as many different colors of bottles as you like, or you can have all the same color for your tree. Blue glass is traditional, as it was believed to specifically ward off spirits. This choice is up to you and does not affect the assembly of the tree. You can leave the labels on your bottles or take them off, depending on what appeals more to you aesthetically. The lights will have more of an effect if you take off the labels so the light can bounce off the glass.
Prepare a tree in your yard so you can place bottles on the ends of branches. You may need to use pruning shears to cut away some of the small branches that will not hold the weight of a bottle and are in the way of the stronger, thicker branches that you want to use. These branches need to have a width that is small enough to place inside a bottle. A tree such as a crepe myrtle or cedar works nicely, but you can use any type or size tree as long as you are able to attach the bottles to it.
Use an extension cord that will reach from your tree to a power outlet to plug in outdoor string lights. You can also use battery powered lights if you prefer.
Wrap strings of outdoor lights around the trunk of the tree and within the branches like you would if you were putting lights on a Christmas tree. Much like with the bottles themselves, you can use one color of lights or a variety of colors. You can also place lights inside the bottles. As you approach a bottle when you are decorating, take it off the branch and stuff some of the lights inside. Carefully place the bottle back onto the branch and move to the next one.