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“Down means go, and up means stop. So upper still must mean go back!”
Percy

In terms of running railways, signals are mechanical and electrical devices erected beside a railway to pass information relating to the state of the line ahead of the engine.

Signalmen use these to direct an engine's crew to make certain movements or to stop from their signal boxes. However, sometimes either the signalmen or the engines do not pay attention, often resulting in accidents.

One time, Henry was pulling The Flying Kipper when he collided with a goods train because snow and ice forced the signal down, making it appear that the line was clear.

On Sodor, all signals point upward to indicate that an engine needs to stop and downward to indicate "go". Gordon and James once played a trick on Percy about "backing signals". So when Percy came to a signal and it went up instead of down to indicate that he could go, he thought it was a "backing signal". Toby was once baffled by the large gantry at Knapford. James also knocked down two signals, once with some well wagons of tractors, and another with Rocky's crane arm causing confusion and delay. However, in recent episodes, the signal for "go" has changed back to downwards.

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Trivia

  • Since the thirteenth series, signals have a different sound when changing.
  • The signals on Sodor are old-fashioned, semaphore railway signals, still used in some countries today, mostly in the United Kingdom.
  • Throughout the television series, some of the signals are incorrectly shown with the coloured side pointing to the left and the black and white side pointing to the right. Also, the yellow arm distant signals all have a red light on them. But in real-life, they only have a yellow/amber light.

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