i took that wire, and connected it to the negative terminal.

 

Granted yes it grounds the loose wire but its already connected to the battery thru that cable so why do it again? If your not having any electrical issues then its no big deal but I would personally ground it to the chassis.
Me and a buddy was doing a motor swap on his car awhile back and we forgot to hook up a small ground to the chassis that was part of the ground cable like that and he was having a few electrical issues and ended up melting its throttle cable bc it was the only metal on metal contact that could complete the ground circuit. it wasn't a mustang but still the idea is the same.

 

Please by all means correct me if im wrong

but shouldn't it be grounded to the body all ready?



if you follow the Wire from the connector piece it goes into that metal circle (idk what its called) that piece is bolted to the body of the car (grounded i guess) then the wire that branches off the metal thing into the Main Cable is just dangling around in my engine bay... i just took that and put it back on teh terminal...

If you can understand that, if its wrong please tell me again lol

 

I'm not sure wether or not you were talking about the lug at the end of the cable or not but as the pic says, each one grounds at specific areas. Just keep in mind that I don't run an EFI car so I may not be completly correct on the exact point of contact but I believe I am. The block does not ground the chasis because of the rubber in the mounts. Obviously if you had solid mounts that would ground too but you probably don't.

On my car I only have the end for the battery and the big lug at the other end grounded to my block. Then I have a 00 cable connecting my block to my chassis. That way everything is grounded.

 

nah dont worry about it they put it there just for the hell of it.
jk
ground it on your engine block, should have a stud sticking out to ground it too.