Where...

Assuming you're not going to have more than one train in the loop at a time, I don't think the location matters too much.  I'd be inclined to insulate right at the turnout to accommodate trains as long as possible.  In my opinion a reversing section is too long only if it starts to interfere with other trains.

Thanks, Rob

I figured as much, I just thought I'd check with the experts to see if I was missing something.

You want it longer than your longest train.

Any lighted passenger cars or a lighted caboose or eot could cause problems if you don't.

Lighted caboose

Just wondering what difference a lighted caboose would make.  I don't have any but might at some point.  Would that throw the AR-1 for a "loop" if the loco and caboose bridged the reverse section at the same time, or something else?  

Re: Lighted Caboose

Yes, that could be a problem.  Any time a reversing section is short enough that both ends of a train straddle it, you can cause the reverser to go wacko.  It's a must that you keep the reversing section long enough, or the trains short enough, that a train can either be entering or leaving the section, but not both.

Case in point, one of my buddies gapped a reverse loop on his 1880s layout to handle a six car freight train plus a loco and caboose.  The problem is longer trains are sometimes used, and they are long enough to hang over both ends of the reversing section.  Even without a lighted caboose, when metal wheelsets cross the gap toward the rear of a train, and the loco has already exited the reversing section, the auto reverser goes nuts.  He has to keep any train over six cars long away from the loop until he re-wires to change the gap location on one end.

Good to know

Alright, I might have to re-think where I put my insulators then.  I plan on having some fairly lengthy trains, so I might have to modify the track a little to extend the reverse loop somehow.

To make it simple.

The reverse loop should work so that the train goes into the loop with the section set at the same polarity as the track coming in.  If the polarity is not flipped while the train is in the loop, there will be a short when the train tries to come out.  If cars with metal wheels are not all the way into the loop when the reverser flips, especially any that have lights, you also get a short.  You won't get a short if you have plastic wheels, but then you will have a lot of other problems with keeping the track clean.