Applying Transitions Correctly

In Video Edit Magic effects can be applied to a single video track. But to apply transitions, you need to have two tracks - Video 1 and Video 2. To use transitions you must have at least one video clip present in Video 2 track. Moreover, transitions work only when they are applied in between an overlapping section of video clip each in Video 1 and Video 2 tracks.

Here is an illustration of the same