Which Lightwave version?
In my 2019 version.. there is no Affect diffuse, and skytracer is affecting the scene by default.
Works almost the same as physical sky and sunsky to illuminate with radiosity as well.
Keep in mind that skytracer clouds can´t cast shadows on to the ground.
For just skybackdrop, you may otherwise just go with dpont sunsky or physical sky.
If you use dpont sunsky, you should set light type to SK sunlight, and perhaps change to manual position option, which allows you to rotate the light manually instead time zone/clock
SK sunlight will also react according to that sunsky model when lowering your pitch of the light, so the color will change to more orange light, had you used a standard light together with sunsky environment, you would have had to set that up with a modifier in the color channel.
Sunsky you have here, later LW versions at the bottom of the page.
Three skymodels, Preetham, Hozek and Nishita..
The Nishita model is a bit more complex and slower to use, which it could be faster..I love that sky model in blender, but it´s a bit too slow in Lightwave, it also looks by far better in blender than in Lightwave.
That´s the Dp plugin, I think there is a native Nishita version however in 2020 Lightwave, but I do not know how fast it is or how nice looking it is compared to Dponts free plugin or blenders version of the Nishita model.
Sorry..I was wrong, I forgot to check the light panel, of course there is affect diffuse there.
Anyway, I think the skytracer isn´t good for much nowadays, you are stuck with positioning by the sun position button, and extra panel for the sunspot and constantly have to reopen for each change, there is no manual rotational control, and the position settings aren´t interactive, unlike sunsky´s time zone.
A tip though, you can override the SKT sun position if you hit "m" for the motion of the light, and uncheck the sunspot modifier, that way you can rotate the SKT sun manually as any other object/Light.