Traceroute is a common diagnostic tool to determine the route packets will take from one IPv4 address to another. It does this using a number of methods but primarily packets will be sent with an ever increasing TTL (Time to Live) values in UDP packets. The routers along the path will notify the trace route program when a packet has expired and therefore the route can be determined. There are a few caveats for this however... 

Firstly Traceroute can only identify transit over TCP/IP routing nodes, so anything along the route which is either lower than layer 3, or an encapsulating protocol cannot be seen by trace route. An example would be frame relay, leased lines, MLPS, and VPN's. 

Secondly, common routing strategies deploy 'shared' or 'load balanced' routes to a given node which can confuse trace route because one packet would take one path and the next another path but this can be identified by running multiple trace routes and comparing results. 

Finally, some routing nodes do not follow the standards and either (a) will not notify the trace route program that its packet has expired, or if it does then it may refuse to respond to RDNS making it hard to identify. 

For all the above reasons, Traceroute can sometimes confuse the issue rather than clarify it and should be used with this in mind. 

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