Woodie, sounds like you are talking about the semifore type signals, of which few exist today. With signal straight up
roceed and track speed,
With signal half down: proceed at reduced speed and be prepaired to stop.
Signal in full horizontale position: Stop.
There is also the light system used today, it's somewhat confusing, because often times several colors show up at the same time. But several different lights on the same signal indicate different things.
Where is a way that you don't need signals at all, just mile markers and use a track warrant system, it's still in use here in the U.S., although being phased out.
Track warrants consist of travel between certian mile markers. A train just starting out would contact dispatch and request a track warrant. Dispatch in turn checks for traffic and will then give instructions such as: Extra 448, proceed at track speed to mile post 875. Once 448 reaches mile post 875 he must stop and get another warrant to proceed further. The dispatcher can and will advise of maintance in a certian area and may even give reduced speed between certian mile markers.
Under the new systems we have we don't use track warrants as such, these areas with signal only for control and are called "C.T.C" and signals are usually 10-15 miles apart. These areas are also using automatic switching, so they can stop you, a switch will turn and the signal will then direct you forward into a siding.
One more way of control is the time tables each railroad uses. These will tell you where the sounding of the horn is forbidden, what types of locomotives can use certian tracks, and also list all track speed for normal conditions.
If you are confused by this don't worry, in the model train world I don't think a life has been lost yet.
That's doing a lot better that the proto type believe me.
Lance