A ladder (or pyramid) tournament is an open competition where members play matches against each other and move up and down in the ranking as they win or lose.
Members of the tournament are listed as if on the bricks of a pyramid. The pinnacle is the highest ranked member. Immediately underneath, lie the second and the third members, and so on. Members of the tournament can challenge higher ranked opponents. If the challenger upsets the higher seeded player, the challenger moves up and takes the spot of the defeated player (that loses one position).
Because there's no elimination, competitions can go on indefinitely!