Tracers are special bullets that contain a powder in their base that burns very brightly during their flight. This enables the shooter to follow the bullets' trajectories. The shooter then, typically, "walks" his cone of fire onto the target by seeing where the tracer is going. Tracers have been used extensively in machine guns since World War I and are usually loaded at a ratio of one tracer per four rounds in ground guns, and one tracer per every two or three rounds in aircraft guns.

Tracers from M-16 rifles on U.S. Army firing range

Tracer rounds are constructed with a hollow base filled with a pyrotechnic flare material. In US and NATO standard ammunition this is usually a mixture of magnesium perchlorate and strontium salts that yields a bright red light. Russian and Chinese tracer ammunition generates green light using boron or copper salts and may include white phosphorus instead of magnesium as the pyrotechnic material depending upon where and when it was made.

Tracers can never be a totally reliable indicator of a gunner's aim since all tracer rounds have different aerodynamics and even weight from ordinary rounds. Over long ranges the stream of tracer rounds and the stream of ordinary rounds will diverge radically, especially given that a tracer bullet's mass decreases over time because the tracer material in its base burns and vaporizes. Although advances in tracer design have diminished this problem it still exists in modern ammunition.

Due to their pyrotechnic payload all tracers are incendiary in nature and can start fires though incendiary tracer bullets, incorporating white phosphorus, are more effective.

Besides guiding the shooter's direction of fire, tracer rounds can also be loaded at the end of a magazine to remind the shooter that the magazine needs changing, particularly when using a weapon (such as an AK-47) that does not lock the bolt back when empty. The Soviet Air Force during World War II also used this practice for aircraft machine guns. Of course this often alerted the enemy that the pilot in question was low on ammo and thus vulnerable.

There are three types of tracers: bright tracer, subdued tracer and dim tracer. The standard tracer starts burning immediately after exiting the muzzle. A disadvantage of bright tracers is that they give away the shooter's location to the enemy—as an old military proverb puts it; tracers work both ways. Bright tracer can also overwhelm night vision devices, rendering them less useful. Subdued tracer burns at full brightness after a hundred or more yards to avoid giving away the gunner's position. Dim tracer burns very dimly but is clearly visible through night-vision equipment.

A recent patent (US 2004/99173) covers the use of an LED and capacitor, instead of a pyrotechnic compound, in an attempt to stop the tracer being seen from the front. As an additional benefit such tracer rounds would keep a constant mass during their flight and thus keep to a more predictable trajectory. However, this benefit may be offset by the fact that such bullets would probably have a very different weight than normal bullets. Furthermore, an LED and capacitor would probably be able to emit light considerably longer than conventional tracer bullets can; 7.62x51mm or 7.62x54mm tracers burn out at 800 meters and 5.56x45mm or 5.45x39mm tracers burn out at 300 meters or less.

A simpler solution would be to put a simple grill over the back of the bullet, as seen on many traffic lights, to cut the observable angle, but that would only work if the tracer material were burning in the rear of the bullet alone instead of in a long narrow cloud burning rapidly for several feet behind the bullet as it travels.