Average True Range was introduced by J. Welles Wilder. Wilder experimented with trend-following Volatility stops using average true range. This tool was subsequently modified to what is commonly known as ATR Trailing Stops. A long trailing stop would be applied when it places below the bar. A short trailing stop would be applied when it places above the bar.
This is a companion discussion topic for the original entry at https://www.optuma.com/kb/optuma/tools/stops/atr-trailing-stop