As someone who has recently been through a very similar story, let me offer some insights.
On the LGB MTS II system
Both the LGB 55005 (MTS II central station) and the LGB 55021 decoder are very old tech. They will work quite well together, but are very limited compared to newer command stations and decoders. You'll probably notice that the 55021 has 11 long pins on the under-side of the PCB - these are designed to interface with certain LGB locos made in the early 2000s.
Slightly newer LGB locos used the 4 fixed wires to connect to the track pickups (brown & white) and motor block (yellow & green), and the
55026 interface cable to connect 6 of these pins to a header on the mainboard which connects to the front / rear lights and any other electronics. Those 6 pins and their matching cable colours are:
- blue: read light
- green: voltage V-
- yellow: voltage V+
- orange: function F1
- red: front light
- brown: voltage V+
Four of the remaining pins are the same as the motor and track wires; the 5th is a third V+. Getting your hands either on a 55026 or some crimp pins to fit onto the decoder pins is not easy, but you'll need some solution if you want to use DCC to drive sounds, lights or the smoke generator on your loco.
This is all described in the 55021 manual.
Note: there are two "lights" outputs, as the decoder can be programmed to treat the front and rear lights differently depending on direction of travel.
Your 55005 has no "P upgrade". Let me very quickly summarise this behaviour, as it may become important in the future:
The DCC standard specifies that the command station can toggle on / off a number of "functions" on each locomotive. F0 is typically the running lights, and F1-8 (and more) are configurable to other functions depending on the programming of the decoder and how its physical outputs are wired.
Early LGB controllers had only 2 buttons: one for lights and one for F1 and the first LGB decoders recognised only F0 (lights) and F1. LGB engineers came up with the solution of toggling the F1 button multiple times (each push switches F1 from "off to on" or "on to off") and adding some circuitry on the F1 signal to count the toggles and apply multiple effects. Ingenious, but horrible from a compatibility perspective. This is known as "LGB serial mode".
Newer 55020 and 55021 decoders can handle F0-F8, but still only have a single F1 output.
The LGB "parallel mode" update upgraded the MTS-II central station and handsets to be able to send F1-F8, rather than having the number buttons just toggle F1 multiple times (which is the behaviour you will get with your handset if you push buttons 2-8). In other words, the "parallel mode update" just enables standard DCC behaviour.
Some modern 3rd party command stations support LGB serial mode, but many do not. And if you ever install a decoder which supports more than F0 and F1, you will not be able to drive those functions (exception: Massoth and some Zimo decoders can enable serial mode compatibility, but it's a pain).
Summary: you'll be able to get your system to work as-is, but if anything breaks down or you want to add a newer multi-function decoder you might find yourself stuck. You'll also only be able to drive a single DCC function (plus lighting).
Wiring in the decoder
Page 8 of your
PIKO 38125 manual shows the wiring diagram for your loco's mainboard. There are some basic analog electronics on the mainboard to do the following:
- switch the lighting direction based on the running direction
- change the sound volume based on the running voltage
- power the smoke generator
- power the whistle and bell in response to track magnets
Things to note
Two pairs of two wires running from the motor block to the board
- one pair (white/grey S1/S2) are the track power pickups
- one pair (red/blue M1/M2) are the motor sends
Note: these are not directly connected, which is good. Your DCC decoder will be inserted between these pairs of wires (replacing the motherboard connections).
Smoke generator wires tap directly off the track power wires, with a switch in the way. A separate board rectifies the (up to) 24V input down to 5V.
Directional light circuitry controlled by main board.
Interfaces for the sound-trigger magnets and volume control
Simple decoder wiring
The simplest way to wire in the decoder is to connect the track power to the decoder and then run the motor outputs of the decoder to the track inputs of the mainboard. This will result in the loco functioning exactly the same as it does for analog DC except that direction and speed is controlled by the decoder.
Question for others: does the motor outputs of the decoder need current smoothing circuitry, or will the mainboard handle that?
Digital smoke control
Another simple upgrade is to detach the smoke module from the mainboard and wire it to a function output on the decoder. The smoke can now work even if the engine is not running and can be turned on or off with the function key. Because the smoke generator already contains a voltage regulator, you will want to program the decoder function output to "track voltage".
Lighting
Lighting is a bit trickier. The mainboard already contains both direction detection and voltage / current regulation for the LEDs. Wiring the lights to the decoder's light outputs handles the direction detection (and lets you turn lights on and off with F0), but you'll need to add extra circuitry and program the decoder correctly or else you
will blow your LEDs.
If you're using the 55021, we've now run out of function outputs and haven't yet got to sound.
Sounds
There are two sets of sounds - the speed-dependent chuff-chuff and the whistle and bell. The easiest option here is to just leave them as-is. For anything more sophisticated, I would recommend buying a sound-capable decoder (e.g Massoth LS or a Zimo large scale decoder) and using the sound functionality from that instead, omitting the PIKO mainboard entirely.