A navigation system, comprising: an instrument that is operable to be moved relative to a subject and having an exterior wall that defines an instrument axis; a holding portion defined by the instrument within a surface of the exterior wall; and a tracking device having: a first conductive wire wound around a first winding axis and connected in series to at least a second conductive wire wound around a second winding axis; a third conductive wire wound around a third winding axis and connected in series to at least a fourth conductive wire wound around a fourth winding axis; a fifth conductive wire wound around the instrument about a winding axis such that the winding axis of the fifth conductive wire is aligned with the axis of the instrument; wherein the first conductive wire and the second conductive wire are angularly offset from one another and the third conductive wire and the fourth conductive wire are angularly offset from one another around the instrument axis and all of the first conductive wire, the second conductive wire, the third conductive wire, and the fourth conductive wire are positioned in the holding portion of the instrument; a localizer operable with the tracking device to generate signals regarding position and orientation information of the instrument; and a navigation processor operable to execute instructions to determine a plurality of degrees of freedom location information regarding the instrument based on the generated signals regarding position and orientation information of the instrument from the tracking device; wherein the first conductive wire forms a first coil portion having the first winding axis and a winding surface perpendicular to the first winding axis; wherein the winding surface is angled relative to the instrument axis such that a first end of the first coil portion is at a first distance from the instrument axis and a second end of the first coil portion is at a second distance larger than the first distance from the instrument axis. an instrument that is operable to be moved relative to a subject and having an exterior wall that defines an instrument axis; a holding portion defined by the instrument within a surface of the exterior wall; and a tracking device having: a first conductive wire wound around a first winding axis and connected in series to at least a second conductive wire wound around a second winding axis; a third conductive wire wound around a third winding axis and connected in series to at least a fourth conductive wire wound around a fourth winding axis; a fifth conductive wire wound around the instrument about a winding axis such that the winding axis of the fifth conductive wire is aligned with the axis of the instrument; wherein the first conductive wire and the second conductive wire are angularly offset from one another and the third conductive wire and the fourth conductive wire are angularly offset from one another around the instrument axis and all of the first conductive wire, the second conductive wire, the third conductive wire, and the fourth conductive wire are positioned in the holding portion of the instrument; a first conductive wire wound around a first winding axis and connected in series to at least a second conductive wire wound around a second winding axis; a third conductive wire wound around a third winding axis and connected in series to at least a fourth conductive wire wound around a fourth winding axis; a fifth conductive wire wound around the instrument about a winding axis such that the winding axis of the fifth conductive wire is aligned with the axis of the instrument; wherein the first conductive wire and the second conductive wire are angularly offset from one another and the third conductive wire and the fourth conductive wire are angularly offset from one another around the instrument axis and all of the first conductive wire, the second conductive wire, the third conductive wire, and the fourth conductive wire are positioned in the holding portion of the instrument; a localizer operable with the tracking device to generate signals regarding position and orientation information of the instrument; and a navigation processor operable to execute instructions to determine a plurality of degrees of freedom location information regarding the instrument based on the generated signals regarding position and orientation information of the instrument from the tracking device; wherein the first conductive wire forms a first coil portion having the first winding axis and a winding surface perpendicular to the first winding axis; wherein the winding surface is angled relative to the instrument axis such that a first end of the first coil portion is at a first distance from the instrument axis and a second end of the first coil portion is at a second distance larger than the first distance from the instrument axis.