Effects need to be “installed” in a very specific location.
Inside the Users folder on your main hard drive is your user folder (with your exact username as the label with a little house icon).
Inside that you will find a folder called Movies.
Inside that you need to have a folder called Motion Templates. If you don’t have it, you can create it. Once created, right click on the folder and Get Info. In the Name & Extensions section, make sure it reads: “Motion Templates.localized” (without the quotes). The case sensitive spelling (including spaces) is very important.
Inside the Motion Templates folder, there should be at least four other folders labelled: Effects, Generators, Titles, and Transitions. If these folders do not exist, you can create them. You must do the same as Motion Templates and go into Get Info and make sure their extensions are .localized. These are the only folders requiring the localized extensions. [Do not add the localized extension from the Finder.]
Determine the type of effect you are installing (Effect, Title, Transition, Generator) and open that folder.
You will need to *provide* a category for FCPX by using a folder at this level or by creating a new folder with a name that will be used as the category in FCPX. If the folders already exist, you can choose a category that already exists; otherwise, create a Category folder for your effect type. (A lot of people miss this step…) The Category is the section in which you’ll find the effect in FCPX in the Effect browser (under the type of effect to which it belongs.)
Open the Category folder and place the entire effect’s folder inside.
Effects in FCPX are actually a “bundle” of files arranged by a parent folder with the same name of the effect. Inside there will be two thumbnail .png files, the Motion project (ending in .moef, .motn, .moti, or .motr) and a Media folder. All of these files (and folder) need to be present in order for FCPX to properly “read” the effect into the application. Many people may make the mistake of removing the Motion project file from its parent folder when installing (and therefore “break” the effect [temporarily — it’s fixable — just put it back].)
There is technically another “level” that can be used within categories called a Theme, but until you’re comfortable installing effects in the “usual” method, you shouldn’t worry about it.