It should not matter where the file is…'download folder', 'upload folder' 'munchkin folder'
Your torrent program shouldn't 'find' the file, you should tell it exactly where the file is that you made the torrent from. That is, when the program asks you where to save it, point it to the original file in whatever folder it is, even if you have moved it from it's original folder.
🙂
PS If Transmission doesn't let you specify which folder your file is in (and I'd be surprised if it didn't), I'd suggest you use another client eg, uTorrent for Mac. You should be able to upload and download from same folder