A system and method that can automatically select a frequency of a magnetic field in a magnetic tracking system. A magnetic tracking system emits an alternating magnetic field using a set of three frequencies. In the present approach, a transmitter is capable of generating multiple sets of three frequencies. A processor selects a first set of frequencies to use and causes the receiver to measure the amplitude of the magnetic field at those frequencies. In one embodiment, the frequency set having the lowest energy is selected. The processor then compares an estimated jitter at those frequencies to the actual jitter experienced using the frequencies. If the actual jitter exceeds the estimated jitter by a predetermined amount, the processor switches to a different set of frequencies and causes the receiver to measure the magnetic field at the new set of frequencies. The process may repeat using the additional sets of frequencies.