Well we use blanks, and yes it is rather expensive, $27.50 for a bag of 100 rounds. But when you have a bolt-action mauser (they are the real thing) 100 rounds will last you three, three-day-events. But as a machine gunner I have to buy about 200 rounds and the other guy (waffenampt) on my MG-team buys another 200-300 rounds.
For a battle we use an accurate scenario but we play it our tactically and as such the outcome may be different that it did in history.
Now you may ask, "how do you know you're hit?" Well all of our engagements are at close range and we are on the honor system, if I got opened-up on by an M1 from 20 feet then I would 'take the hit' and 'die'. we are all friends and so we try to be fair as possible.
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"Victory at any Price!"
SS-Panzergrenadier