The Folder trigger (v7.0+) executes the macro when a specified folder on your Mac:
The item must be directly in the folder - changes in a subfolder will not be noticed.
You can have the trigger ignore partial or changing files, so for example if a file is being downloaded or copied in to the folder, the trigger will wait until the download/copy has completed and can ignore partial files (files with extensions that are known to be “in progress” files).
Note that waiting for the file to stop changing adds a necessary delay to the trigger as Keyboard Maestro cannot tell in advance that the file has stopped changing.
The %TriggerValue% text token contains the path of the file that was added or removed (prior to 7.1 this was only the file name, not the full path).