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Tracer rounds are built with small phosphorus or magnesium mixtures in their base. Because of its pyrotechnic composition that’s ignited by the burning powder, it burns very brightly when fired. It produces a trail of light that’s visible during daylight and even more so at nighttime. They can have different colors too depending on the chemical mixtures.
There are several benefits to this. It helps guide the shooter during low-visibility conditions, improves shooter accuracy, and signals others where to focus their fire. Even so, they are often used sparingly and usually loaded between several normal rounds.