For an under the tree layout you might want to make it two seperate tracks. Switches and complex wiring add unneeded complication. For a Christmas layout it's kind of nice to have two trains on independent tracks. That way you just power up and let the trains run. Thats alot of layout in a small space. Looks good.
Good-Luck!
I do have a few things regarding the operation as you where suggesting. You'll have to think of something to throw the switches if you'll use the small circle for another train then the one that is on the figure 8. The normal anti derailment feature will not fully work in automatic operation.
Both switches connecting the figure 8 to the small oval have to be wired together, so that if the figure 8 train runs on the antiderailment feature, throwing the switch in front of it, that the other switch also will be thrown to straight rout. If the loop train runs across it's antiderailment feature it will have to set both switches to the diverging route.
To take control of the small tram running the inner circle I would suggest that you make a "start and stop" section and not to insulate the whole loop. That way your tram will always stop there and not with it's nose in the clearance of the figure 8 train. It's a nice layout to operate automaticly!
(Thor's website is indeed a very huge pile of all fantastic forms of mainly very small layouts. It's amazing what he can do with space!)
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