The best way to make smooth transitions between audio clips in Audacity is to use the Envelope tool shown below.
This tool allows you to accurately control the volume of each track. Want to start with a song and then have it fade into the background of a voice over or narrative? Simply put the music in one track, the voice in another, and use the envelope tool to adjust the volume. Below is what the waveform looks like for this technique.
As you can see, I clicked two times with the envelope tool on the lower track to set the beginning and end of the fade (seen as white dots on the blue envelope). Then, I clicked and dragged the second dot to a lower volume level to produce a smooth transition. It is helpful to vertically expand the track that you are fading out so that you have more control over the volume.
There is an artistic judgement involved in deciding the following factors:
- how fast to fade out
- how loud to make the background track
- when to start the narrative
My best advice to decide these factors is to highlight the section of the track that you want to refine, press space to play/stop, and use the move tool in conjunction with the envelope tool to produce a well-timed, dynamic fade to a background that is slightly audible but not overpowering.
*Expert Tip: Inside the blue envelope around the waveform is a finer adjustment. This is adjustment is useful for highlighting or covering up sounds within a given envelope volume level.