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Mike, attach the black wire from the signal anywhere on the isolated section of rail. Train wheel-sets will short the isolated rail to the other (grounded) outside rail, thus creating a current path. The red wire goes to accessory hot and you have a completed circuit and blinking away they go!

I recently installed a Lionel grade crossing with lights:

       IMG_1459

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Mike, you have one outside rail grounded and the other is isolated by the cuts for the lift-out. The black wire from the crossing signal needs attached to that isolated outer rail (and accessory hot connected to the red wire) and you are good to go. That is all there is to it.

I have the same situation as you do with a siding not protected by my crossing lights (where the locomotive is in the pic). In this scenario the Conductor flags that grade crossing which adds complexity to Operations. Also a train cannot block either grade crossing for an extended period of time and that adds operating complexity as well.

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OGR Publishing, Inc., 1310 Eastside Centre Ct, Ste 6, Mountain Home, AR 72653
800-980-OGRR (6477)
www.ogaugerr.com

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