To make a real time fade-in / fade-out between two videos:
1. put two video files into the canvas (mixing view)
2. select both sources by drawing the rectangular selection area around them (in green)
3. to make this grouping permanent, double clic on one source : the connection line changes color
4. move the group (the two videos attached) so that one video enters the circle while the other leaves it

How does it work?
The transparency of a video is defined by its position in the mixing circle: videos at the center are 100% visible, videos outside are hidden: the intermediate is a gradient of transparency values, and moving a source into the circle makes it more or less visible.

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