If I'm understanding the sensor operation correctly the Signal status would depend on which direction the first train enters the loop.I'm not sure what you mean re: correct LED status upon power up. Shouldn't sensor 1 and 2 relays control that?
When first power up Signal 1 has to be either green or red and vice versa for Signal 2 correct?
I have tested the circuit and it functions correctly to the design parameters as I understand.
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