I have a swf file that loads a xml file. When running the swf file locally it is not loading the xml file. When running the swf file from my website, then xml file is loaded correctly. I read this thread: https://forums.adobe.com/thread/2217895 , did the addition of the swf file to the settings mentioned in the linked pdf file but didn't help. I also added the folder containing the swf and html file which call the swf file but nothing changed. I deal with this problem when using Chrome. Firefox is just showing blank page locally.
At this point, due to various browser restrictions (which, from the perspective of web security, are a good thing), running content in the browser locally that needs access to the local filesystem is a recipe for pain and frustration.
You're far better off just running a local webserver, especially if you're doing any kind of development. It may also save you a bunch of pain when you move that content to the web and then realize that all of the cross-domain security restrictions are suddenly enforced, where they might not have been in the local context.