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In many countries, transport system basically works on the static scenario. There is a fix duration for which the red & green signals used to open and close and it remains same for almost all times of day whether the roads have heavy traffic or low. There is no real time timing calculation. Because of this situation the traffic is not so properly adjusted and handled on the roads. We have developed a new and relatively easier method for image processing of traffic. To monitor traffic flows is not new; this research is examining the integration of digital video and image processing to improve the transport system and try to reduce the traffic jams. A technique has been developed to process the digital data, in real time, to estimate traffic density directly from the video images. The algorithm is capable of detecting vehicles and calculates traffic density, using image processing techniques. We have named the application as "IntelliSig", Intelligent Signals.