A transgender person has a different identity than the one people thought they would have when they were born. Example: a child is born and looks like a boy, but grows up and explains they are a girl. Transgender also includes people who do not identify as man or woman, but identify as Non-Binary.
This sign is a loanword from ASL, and is popular among Trans people when identifying themselves, as an older Auslan sign is seen as potentially transmisogynist and poorly designed due to it's reference to genetics.
This sign has been recently gaining popularity, but isn't yet widely known by the wider deaf community as of 2019, so if you're signing to a group, you should explain the sign or use fingerspelling instead.