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It's located on the front of the engine behind the crankshaft pulley. It sometimes disguises itself as a problem with ignition, but check the MAF sensor for contamination. It will give loopy readings to the engine in the fuel system if it's dirty or contaminated with oil. Hope that helps!
If you have access to a scanner that is capable of reading live data plug it in and crank the vehicle if you can see the RPM change then it is not your crank sensor. Do you have spark? The sensor is located by the harmonic balancer. Here is some more info. http://www.justanswer.com/mercury/4bmhe-mercury-cougar-crank-position-sensor-located.html
First, if you would like to receive USEFUL information about your vehicle, (ESPECIALLY when you are asking about engine controls) it would be nice if you would mention WHICH ENGINE your vehicle is equipped with!
1995 Mercury Cougar XR7 was equipped with 3 different engines: 3.8L NON-SC VIN CODE  3.8L SC VIN CODE [R] 4.6L V-8 VIN CODE [W]
The crank sensor for both of the 3.8L engines is located at the lower right FRONT of the engine.
The crank sensor for the 4.6L engine is located at the lower right REAR of the engine.