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In TSW you are “penalized” by receiving reduced or no points for that section of track you exceed the speed limit. Of course, just like real life, if you don’t care about the points in TSW then there is no penalty. And in real life, if you don’t care about safety or your driving record, then speed limits are only a suggestion :-)
As to what the speed limit is.. learn the signals for German routes, the in cab signaling systems for US routes ( some US routes the signals are also speed based and not occupancy based ) and U.K. routes keep an eye out fo line-side signage.
This is the distance to the next speed change (line speed). Now sometimes on certain routes, speed limits are enforced in the cab such as in LIRR ATC or via PZB for the German routes if youu are playing with these enabled.
No, the red line on the speedo is the current track speed limit.
What you are seeing there is a visual representation in the game world of the next upcoming speed change (Which can be toggled). This is the same as the countdown to next speed change mentioned at the start. If the speedo turns red before this point, you have exceeded speed limit which may have been enforced via signals or safety systems. (The HUD doesn't show speed reductions enforced by signals)
Well, again it all depends on the loco/route and safety systems being used. Generally, the red line on the speedo is usually the current speed limit and you should stay below that line. The 'countdown limit' up the top (and the speed indicated in the red circle) is the distance to the next speed change.
The red line of the HUD indicates the speed of the line according to the static speed limit signs (painted plates for example) that there is to the route. Points penalty applies.
The speed of the line according to the dynamic speed limit signs (light signals for example) that are on the route, do not receive a point penalty. However, to make it more realistic, they must be considered.