Train Signals are used to direct the movement of Trains to avoid collisions and bottlenecks.
Block Signals can be placed on Railways to create 'Blocks' between each other. When a Train is occupying such a Block, other Trains will be unable to enter it.
Caution: Signals are directional! Trains are unable to move against this direction, so be sure to set up Signals in both directions for bi-directional Railways.