Alan asked a series of really good questions:
I want to clarify my understanding. I have a 2019 Mac Pro with four internal SSD drives, plus four external HDD drives/RAIDs. Using it, I’m about to edit a feature film shot in 4K. It will run 90 – 100 minutes.
I want to optimize my system for performance. Here are my questions:
These are all excellent questions which require a longer explanation than can be put into an email.
BEFORE YOU START
Before you start, download Blackmagic Disk Speed Test from the Mac App Store. This free utility is used to measure the speed of your storage drives.
NOTE: Another excellent – and free – disk speed test is AJA System Test Light. While I think the AJA software is more accurate, Blackmagic provides indicators indicating which video formats your hardware will support.

Custom settings for Blackmagic Disk Speed Test software.
Open the software and click the Gear icon. Set Stress to 4 GB, which more accurately represents a video file, then click Set Target Disk to select the disk you want to measure.
Let the test run at least twice, then use numbers from the latest test.

Here’s the important part. Look at the check marks. The red rectangle, which I created, should all show green. If they so, that drive is fast enough to edit 4K media. The yellow box indicates frame rates for different frame sizes of ProRes 422 HQ. (Frame rates for ProRes 422 will be slightly higher.)
Once you know the speed of all your drives, you can now configure your project.
NOTE: There are two ways to measure speed: Bytes per second and Bits per second. We use bytes to determine hard disk speed, bits is used for the Internet. Megabytes per second is abbreviated as MB/s. Megabits per second is abbreviated as Mb/s. To calculate MB/s from Mb/s, divide Mb/s by 8. Yeah, that upper vs lower case “b” causes a lot of confusion. You want to always measure MB/s and keep your cases correct.
MAXIMIZE PERFORMANCE
Here are my general suggestions for configuring your system:
Exporting to the internal drive, assuming there’s enough space, is the fastest way to export because it plays media from one drive and records it to a separate, very fast, drive.
Let’s take a look at each of these in more detail.
NOTE: You can store files on the boot drive, it harms nothing. But the boot drive often fills quickly and is needed for both FCP and the operating system. Where possible, use multiple drives.
WHERE TO STORE LIBRARY FILES

You determine where the Library file is stored when you create it. By default, this is the Movies folder on your internal boot drive. While this is OK, I recommend storing libraries on drives other than the boot disk to keep as much free storage space on the boot disk as possible.
Final Cut refers to the Library file constantly for database references and updates, render files, work files, and metadata. Storing the library on your fastest drive yields the best performance. If your fastest SSD has limited storage, move the cache files to a separate location. I explain how in a few paragraphs.
NOTE: You can change the location of any storage location at any time. FCP will NOT move existing files, but will store any new files in the new location. This can help if a library is getting too full.
WHY USE SSDs?

It is important to understand that SSDs are optimized for media. Unlike spinning hard disks (HDD), SSDs have no moving parts. They have no latency. They are far, FAR faster. They can play 40 multicam clips simultaneously without breaking a sweat.
SSDs have speeds in the thousands of megabytes a second. HDDs in the low hundreds of megabytes a second.
NOTE: Thunderbolt 3/4 maxes out at about 3,000 MB/second. Thunderbolt 5 maxes out about 6,000 MB/second. While different storage systems will run at different, and slower, speeds, SSDs take better advantage of Thunderbolt speeds more than any spinning hard disk.
The only reason not to use SSDs everywhere is that they are far more expensive and hold far less than HDDs. So, the general rule is use SSDs where you need the speed, and HDDs where you need the capacity.
WHERE TO STORE RENDER AND CACHE FILES
Cache Files
Cache files include render files, analysis files, thumbnails and other work files. These are stored in the Cache files location. By default, FCP stores cache files in the library. This means that your library file will get very large as render files, and other work files, accumulate.

However, you can store cache files on a separate – but still fast – drive by selecting the library in Final Cut’s Library List, then choosing Window > Project Properties (shortcut: Cmd + J).
This panel (above) shows the current location for Media, Motion templates, Cache (work) files, Backup files, and which drives hold media for the currently open library.

NOTE: You can delete render files at any time by selecting the library in the Library List, then choosing File > Delete Generated Library Files. Because FCP keeps render files even if you don’t need them, deleting unused render files is a good thing to do every few days.
To make changes, click Storage Locations > Modify Settings.

This dialog displays menu options to change where imported media files are stored – more on this shortly, Motion templates, Cache files, and FCP Backups.
NOTE: FCP backup files only store project data, they do NOT store media. Media will need to be backed up separately.

To set cache files to a custom location – in other words a different fast drive – select a custom location from the Cache menu.
NOTE: All Cache files need to be stored on a fast drive for best performance. Ideally, an SSD.
Media Files
To save storage space, media files should be stored on drives fast enough to support playback, which was why we used Blackmagic Disk Speed Test to determine the speed of each drive, but media does not need to be stored on screaming fast drives. Most media – excluding multicam edits – takes less than 100 MB / second for playback of a single stream.

However, if you have media scattered across multiple hard drives and want to consolidate it into a single location to simplify backup, change the Media menu to a custom setting. All media used in your project will be copied, not moved, to this new location.
This will require more storage space, but will simplify backing up all the media used for this library.
IMPORTING MEDIA

If you want to import media, but NOT copy it into the library, choose Leave Files in Place in the Media Import window. This is my preference for most projects.
If you want to import media AND store a copy of the media in the library, choose Copy to library. This consolidates all media files in the library. This makes the library bigger, but simplifies backups because when you copy the library folder to a backup location you are copying all its media as well.
NOTE: Even when using Copy to Library, Final Cut backups made by Final Cut do NOT include media. Media will only be included when you make a backup of the library manually.
By default, importing media copies it into the Library folder. If you want to import media and copy it into a SEPARATE folder, specify the media location (as shown above), then choose Copy to Library in the Media Import window. This will copy the media into the custom folder, without increasing the library size.
BIG NOTE: It is important NOT to move media files once they are imported, unless you are storing them in the library. If you move a media file once it is in the project, links between FCP and that media break. While you can relink them, the User Guide explains how, relinking is a pain and wastes time that you don’t need to waste.
Think about how to want to organize your media before importing, then, once you import it, don’t move it.
WHEN TO OPTIMIZE MEDIA
Optimizing media converts camera native video formats into ProRes 422. This is a 10-bit color space which is optimized for editing by using I-frame compression. Files worth optimizing include H.264 and HEVC compressed files.
NOTE: All Apple silicon systems have a media engine that uses hardware acceleration to compress and decompress ProRes, H.264, and, on more recent systems, HEVC media. While this means we can easily edit this media on Apple silicon, only when we optimize media do we get access to great color space and smoother color grading.
Optimized files provide faster editing performance, require less CPU processing when running on older systems, and a 10-bit color space which provides a 4X improvement in color when editing using 8-bit material.
NOTE: While optimizing media requires more space, FCP won’t optimize files that are already optimized. Because of how they are compressed and the color space they use, ProRes files will be larger than H.264 or HEVC media.

The easiest way to create optimized or proxy files is to select the appropriate option in the Media Import window (above). All transcoding is done in the background, so you can keep on working while FCP processes media.
WHEN TO USE PROXY FILES
Proxy files are a good choice when you have an older computer, when you are creating a multicam edit with lots of streams, or when you have slower storage.
NOTE: Due to hardware latency, even a fast RAID will have problems playing more than 8-10 streams. SDDs make a huge difference in media playback for multicam edits. Latency is a factor whether you create proxy files or not.

For best results to create the highest image quality and fastest performance, select ProRes Proxy at 50%. If hard disk space is tight, use 25%, but you’ll notice drop in quality when viewing proxies.
Proxy files are used for review, rough cutting and polish editing. For color grading and final output, switch back to Optimized/Native files.
SUMMARY
Final Cut provides a lot of flexibility on where files are stored. For larger projects, where you need more control or need to manage a massive number of files, think about where files should be stored stored before you start importing. Then optimize your storage locations to make the most of your system.