An alarm system for indicating the specific location of an intrusion into an enclosed space, as well as a method for installing the alarm system, are disclosed. The intrusion causes illumination of an indicator light outside the enclosed space and within the outer perimeter zone of the enclosed space, thereby indicating the specific location of the intrusion. At least one interior sensor located within the enclosed space generates a specific intrusion location signal in response to movement therein. A control system responsive to the specific intrusion location signal causes the indicator light to emit light that is visible from outside the outer perimeter zone of the enclosed space. The emitted light can indicate the specific location of an intrusion by directing light towards the specific intrusion location, and/or by surrounding the specific intrusion location, and/or by activating a light display that produces readable output of the specific intrusion location.