Step1: Create an object by using an oval tool
Step2: Righ Click on your object and select Convert To Symbol
Step3: Select Movie Clip and press ok
Step4: Right click on any empty frame from time line and select insert KeyFrame
Step5: Click on your last keyframe and then click on your object, from properties pannel Select Color and from Dropdown select Alpha change the Alpha to 10%
Step6: Right Click any where between your starting and ending frame and select Create Motion Tween
Step7: If you see an arrow line on your time line, You are done
Step8: Now test your movie by click on Control Menu and Test Movie
Step9: Now lets make Fade out Effect, Right click on any empty frame after your last frame  and select insert KeyFrame on time line
Step10: Click on your new last keyframe and then click on your object, from properties pannel Select Color and from Dropdown select Alpha change the Alpha back to 100%
Step11: Right Click any where between your starting and ending frame and select Create Motion Tween
Step12: If you see an arrow line on your time line, You are done
Step13: Now test your movie by click on Control Menu and Test Movie
Step14: Yahaaaa, Good job. Now you can see your fade in and fade out effect using Flash
We can use the same effect on an image or text