Ensuring power system safety involves effective arc fault detection and localization. Existing devices struggle to differentiate between normal and abnormal conditions, especially in confined spaces, posing precision challenges. Strategically placing antennas around the arc helps detect electromagnetic radiation, even in limited areas, enabling valuable data collection for real-time monitoring. To address these challenges, this paper proposes integrating experimental work using a compact multi-square microstrip antenna and signal processing techniques. The study compares the effectiveness of two signal processing approaches: Discrete Wavelet Transform (DWT), and Continuous Wavelet Transform (CWT). These techniques separate genuine arc signals from background noise by identifying unique characteristics and isolating the dominant frequency. The Time of Arrival (ToA) is measured and used in Least Square and Gauss-Jordan Elimination methods to calculate the arc source location. The outcomes illustrate the precision of the proposed model in detecting and pinpointing arc source signals, with error margins ranging from 0.0615 to 0.0713 m for the CWT technique, 0.0688 to 0.0789 m for the DWT technique, and 0.0799 to 0.0844 m from the actual signal captured. These results hold promise for enhancing the integration of experimental approaches in assessing arcing conditions, thereby addressing challenges in insulation systems.