Signal strength is pretty useless information for most people. The bars typically indicate a subjective calculation of signal quality based on both signal strength and signal-to-noise ratio. There's no standard, and it's not something that can be expressed in dBms.
For example, you could have a strong signal that is getting terrible interference from another strong signal and (although your dBm reading would be great) your bars will be low because your phone is letting you know that it can't make a decent call. (i.e. It's essentially being jammed.)
Or for example, you could have a moderate signal with no interference and your bars will read high because your phone is letting you know that it can make a decent call.
The reason that your bars fluctuate up and down when you're stationary isn't because the radio towers are increasing and decreasing their signal strength. It's mostly because other radio noise is coming into and going out of the area.
Same goes for WiFi bars.
