The Ultimate Guide to Ableton Live MIDI Effects
MIDI effects allow you to alter MIDI data before it reaches its destination. A MIDI effect can be used by itself on a MIDI track whose output is some external MIDI sound device or before a virtual instrument in the Device View.
MIDI data passes through the MIDI effect, which then passes the altered MIDI on. Note that MIDI effects do not change the sound that comes out of an instrument the way audio effects do. Instead, the MIDI effects change the notes coming in to those instruments.