Notice that the red rail meets the black rail. We need to do something about that! Fortunately, Aristo-Craft makes Plastic Rail Joiners, part number ART11901:
Normally we want our rail joiners to provide solid electrical connections, but this is an exception. What we need to do is separate a section of the track from the rest of the layout:
So now our trains will run, except for on our isolated (blue) section. Since this is a reversing loop, we'll need a reversing switch, so quick, run down to your local Radio Shack and pick up a DPDT switch. You'll notice it has 6 connections. We'll wire it up like this:
When we turn the switch one way, it will connect the + to the top blue wire and the - to the bottom, and when we switch it the other way, it will connect the + to the bottom blue wire and the - to the top.
Now, we can wire this switch to the blue section of our track, and it will work, with one annoyance. While your train is in the reverse section, you'll have to stop, reverse the switch and reverse your controler, before you can move onto the rest of the layout. There's got to be a better way, and indeed, there is. Wire your throttle straight to the reversing section, and wire the rest of the layout to your new switch. Now, all you need to do is throw the reversing switch while your train is in the reversing section.
There is still one nusence. One end of your reversing section will be the wrong polarity to the rest of the track. If you run your train onto this end, you'll have a short and blow a fuse or turn on the overload light. You could just remember, "If the switch is up, always go in this end," but that never works for me. What we need is a signal that says, "Don't come in here!" Notice the problem is that at one end the rails are the wrong polarity. We can make use of that and simply wire a light bulb across the plastic rail joiner. The light bulb will be on if this is the wrong end.
Do not enter signal:
Of course, we can have a signal to say it's safe to enter:
I think the Aristo-Craft Signal Bridge, part number ART7110, would be a great place to put these light bulbs!