The wire hanging from the 2-wire connector (Terminal #2) goes to the large output stud to sense voltage.
The wire from the other terminal gets power from the "LOAD" side of the ignition switch, and should have a diode (as shown), a resistor or an "idiot lamp" in-circuit to protect the alternator AND allow the ignition switch to shut down the engine when switched "OFF". In outer words, the diode, idiot lamp, or resistor prevents current from "backfeeding" out the #1 terminal into the ignition circuit at shutdown.
It APPEARS there is a diode covered in heat shrink tubing in the short little harness, so, HOPEFULLY, you are "good to go" in that respect.
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