Definition
The true range of a candle is the largest of three distances: its high minus its low, the distance from its high to the previous close, and the distance from its low to the previous close. The last two are what make it a true range rather than a range: a market that opens far from yesterday's close has moved that far, even if the candle itself is small. The average of those ranges is a distance in the price's own units, in dollars for a dollar-quoted market, and it says nothing at all about direction.
This site computes it over 14 daily candles, as the simple mean of the 14 true ranges. It therefore needs 15 candles, since the first range needs a previous close, and it returns nothing rather than a guess when the history is shorter. Wilder's original smooths the ranges instead of averaging them, so a figure from another tool can differ: the pages here and the agent's own code use the same simple mean, which is what makes a figure read on a market page the figure the agent works from.
Its use here is to measure distance in volatility rather than in percent. The pilot places each step of its ladder a measured number of daily ATRs below the last for a long (the charter's stepAtr, 0.5 by default, the figure a two-year measure kept, with bounds from 0.1 to 3), so a quiet market gets narrow steps and a violent one wide ones without anyone retyping a percentage. The same unit bounds a stop in the charter's other mode, between stopAtrMin and stopAtrMax daily ATRs from the entry.
Formula
true_range = max(high - low, |high - previous_close|, |low - previous_close|) for each candle, and the ATR is the simple mean of the last 14 of them: atr = (tr_1 + tr_2 + ... + tr_14) / 14.
Example
An example, in round figures. A day whose high is $102,000 and whose low is $99,000, after a close of $100,000, has a true range of $3,000: the high minus the low, since the distance from the high to the previous close is $2,000 and from the low to it $1,000. If the last 14 daily true ranges average $2,500, the ATR is $2,500, and steps 0.5 ATR apart sit $1,250 from each other, so a ladder of five steps spans $5,000 below the first entry.