The directory can be relative or complete, and should have the standard directory delimiter appended to it. All input and ouput files would have to be in this directory. In UNIX, you can set a path variable pointing to the programs and simply set your current working directory to the working directory. For Mac, you double click the icons and should use a working directory variable.
Relative paths are also possible.
The two colons mean go up one level and then go into the data folder.