Click to highlight the track containing the loop that you want to fade. Your tracks are the horizontal bars appearing on the Arrange window (the main project window), and the loops appear as green or yellow shaded regions on the tracks. To highlight a track, click anywhere in the left column, where the title appears (such "Audio 1" or "Inst 1").
Click "Track" on your menu bar and select "View Track Automation" from the drop down menu. Your tracks will now expand to about twice their previous height, with a line graph appearing beneath each track. The line graphs represent the automation for each track. For example, you can move the line up and down along the time line to gradually adjust the volume, panning or selected effects.
Click the gray drop down menu in the left column of your selected track, on the track automation bar. Select "Volume" from the list of parameters that appears. The line graph should now appear as a straight line across your screen, since you have not yet made any automation adjustments to your volume.
Click the line on the graph, in the exact spot where you want your fade to begin. For example, if you want to fade out your loop at the end of a song, you might locate the end of the song at 3:28 on the time line, and start your fade about 10 seconds before then, at 3:18, for a smooth fade out. Therefore, you would click the line directly below the "3:18" on the time line, which spans along the top of your screen. A dot will appear on the line.
Click the line a second time, in the exact spot where you want your fade to end. To refer to the previous example, if you started your fade at 3:18, you might end it at 3:28. You should now see 2 dots on your track automation line graph.
Click the second dot and drag it to the bottom of your line graph, using your mouse. Do not drag it to the left or right, but try to move it straight down. The line between your two dots should now slope horizontally downward, indicating a downward fade. Now, whenever you play the loop, the volume will fade based on the specifications of your track automation.
Reverse the position of your dots for a fade-in effect. For example, if you want your loop to gradually become louder, instead of softer, just place your first dot at the bottom of the line graph, and your second dot toward the center of the line graph, for an upward slope.