Like Thorsten mentioned in the comments section, you have described bubble sort. Modified from Wikipedia, pseudocode for bubble sort is as follows:
procedure bubbleSort( A : list of sortable items )
n = length(A)
for i = 1 to n inclusive do // Outer Loop
for j = 1 to n-1-i inclusive do
/* if this pair is out of order */
if A[j] > A[j+1] then
swap(A[j], A[j+1])
end if
end for
end for
end procedure
The loop invariant in bubble sort (for the outer loop) would be that, after each iteration of the loop, the entire array until the current value of i would be sorted. This is because, each time one reaches the outer loop, it will be after going through all iterations of the inner loop (from i to n-1), finding the minimum element there and swapping that element with the ith one.
Bubble sort is, indeed, in place, since all the sorting happens within the original array itself, and does not require a separate external array.
Edit- now onto insertion sort:
Pseudo code is as follows (all hail Wikipedia):
for i = 1 to length(A) - 1
x = A[i]
j = i
while j > 0 and A[j-1] > x
A[j] = A[j-1]
j = j - 1
end while
A[j] = x[3]
end for
Here, at each step, what happens is that for each element, you select the appropriate location at which to insert it into the array, i.e., you insert it just after the first element that is smaller than it in the array. In a little more detail, what the inner loop does is that, it keeps shifting elements to the right till it encounter an element smaller than the element in consideration, at which point you insert the element just after the smaller element. What this will mean is that every element until the aforementioned element is sorted. the outer loop ensures that this is done for all elements within the array, which means that by the time the outer loop completes, the array is sorted.
The loop invariant for the outer loop is, like before, that after the ith iteration, all elements till the current i will be sorted. Just before the ith interation, however, all elements till i-1 will be sorted.
The insertion sort algorithm does not require an external array for sorting. More specifically, all operations are done on the array itself (except for the one variable we need to store the element that we are currently trying to insert into its appropriate location), and no external arrays are used- there is no copying from this array to another one, for example. So, the space complexity required by the algorithm (excluding, of course, the space the array itself occupies) will be O(1), as opposed to dependent on the size of the array, and the sort is in-place, much like bubble sort.
