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The first thing you should understand about transitions is that you should avoid using them! That’s right. Although transitions have their place, they almost always call attention to themselves and anything that calls attention away from the story can potentially ruin the experience for your viewers. You should always be in control of your story and your art (which, in this case, is video editing), so be in control, too, of how and when you use transitions.
You will find that there will be times when you want to call attention to a change in your story, such as a change of location or to show the passage of time. A transition such as a fade to black or a slow dissolve might work perfectly in such cases. In other cases, transitions can add to the fun. For example, if you are making a comedy video you can actually use transitions for a comic effect (think funniest home videos). Or, you might be making a genealogy video that includes pictures of your ancestors and you want to use transitions more in sync with the rest of the old-time feel of your project. These are just a couple of good reasons to use transitions. George Lucas intentionally used transitions and wipes in his Star Wars movies for that movie serial look that he remembered watching growing up.