Flag semaphore signalling uses 2 flags, held in specific positions to signify letters.
In the 1850s, U.S. Army Major Albert J. Myer, a surgeon by training, developed a system using left or right movements of a flag (or torch or lantern at night). Myer's system used a single flag, waved back and forth in a binary code conceptually similar to the Morse code of dots and dashes. This is sometimes called the wig-wag method of signaling, or "wig-wagging". More mobile than previous means of optical telegraphy, as it only required one flag and a 6-8 feet platform on which to stand the signal corpsman, this code was used extensively by Signal Corps troops on both sides in the American Civil War. (Its first use in battle was by Confederate Lieutenant Edward Porter Alexander at the First Battle of Bull Run in 1861.)
In this code, alphabet letters were equated with three positions of a single flag, disk, or light. The flags measured two, four, or six feet (60, 120 or 180 cm) square and were generally either red, orange or black banners with white square centers or white banners with red or orange square centers. The disks were 12 to 18 inches (30 to 46 cm) in diameter and were made of metal or wood frames with canvas surfaces. Somewhat easier to handle than the flags, they provided a different method for daylight communications. The lights were kerosene lanterns attached to a staff. A second "foot torch" was placed on the ground before the signalman as a fixed point of reference, making it easier for the recipient to follow the lantern's movements.
Each letter consisted of a combination of three basic motions. All began with the flagman holding his device vertically and motionless above his head. The first motion was initiated by bringing the device downward on the signalman's right side and then quickly returning it to its upright position. Motion number 2 involved bringing the device down on the left side and then returning it to the starting position. The third motion required lowering the device in front of the signalman, then restoring it to its vertical position. A flash demo can be found here