Tracer ammo is usually loaded as every fifth round in machine-gun belts. This is for the gunner to know where to fire at, as machine guns are usually not easy to aim. In WW2, fighter planes were loaded with tracer ammo for the same purpose.
Another usage of tracer ammo is to load them as the first five rounds in gun magazines. This is for the shooter (who probably is in a fiery gunfight) to remind him that he is running low on ammo. The major disadvantage of tracer ammo is that it gives away the position of the gunner.
