This is a great, cost effective, way of tracking objects via IR LEDs. It may not be the most accurate form of object tracking, but it has to be one of the cheapest. Check out the link for a lot more information on how to make your own.
This sensor is a short range obstacle detector with no dead zone. It has a reasonably narrow detection area which can be increased using the dual version. Range can also be increased by increasing the power to the IR LEDs or adding more IR LEDs.
More about how to Make your own IR obstacle detection sensor
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