Custom fades are a practice nearly as old as the automobile itself. The concept is simple--transition from one colour paint to a different colour without leaving any sign of demarcation between the two. Such signs can take the form of straight lines (if you use tape) or of splodging and spotting if sprayed by someone who doesn't know what they're doing. Many would-be customizers make the mistake of thinking that fades are simply a matter of adjusting gun aperture and pressure, when in reality it's all about the paint mix. However, you won't be able to do any of this without the right equipment and EPA certifications.
Sand the area that you wish to fade with either 800-grit sandpaper on a dual-action sander, or use a grey scuffing pad if you don't want to buy sandpaper. Either of these will texture the surface of your panel enough to allow the paint to adhere, but won't provide so much texture that the flakes in metal-flake paint will stand up on end.
Spray the entire panel that you wish to fade with a clear base coat, which is paint without colour or pigment. This clear coat of wet paint will allow the pigments in later coats to flow into each other more smoothly, resulting in a cleaner fade.
Spray one side of your panel (or the top or bottom if doing a horizontal fade) with your full-strength fade paint. If your car is white and you want a blue fade, then the fade colour is blue. Paint a 6-inch wide stripe of solid fade colour along the edge of the panel, making sure that you angle your gun so that it points away from the rest of the panel (toward the fade colour). This will help keep your colour transitions gradual.
Pour half of your full-strength fade colour out of your gun's reservoir and into a cup. Replace the exact amount you poured out with clear base so that the end result of your newly "stepped down" paint is a 50/50 mix of full colour and clear.
Go back over your blend again, keeping the gun angled toward the full-strength part of your fade and away from the rest of the panel. Move your gun back and forth in gentle 12-inch sweeps. The idea here is to overlap your full strength area by about 4 inches while extending the stepped down mixture about 8 inches into the unpainted panel.
Step your mixture down again by pouring out half of the mixture and replacing that half with more clear base coat. Your new mixture will now be 25/75 full strength paint and clear base.
Repeat the painting procedure described in Step 5, moving another 4 inches away from the full-strength painted area and toward the unpainted panel.
Step your mixture down again by half so that it's about 13/87 full-strength paint and clear. Repeat Step 7. Step down again so that your mix is 6/94, repeat Step 7. If you're fading from a really dark colour to a light one, step down and fade two more times.
The technical term for this technique is "wet bed blending." This term derives from the fact that none of the paint ever goes onto a dry surface, so splodging and spotting is almost non-existent.
Unless you own a professional shop and are EPA certified to use high-volitile organic compound (VOC) paints, then you can only used water-based acrylics to paint your car. Acrylics don't tend to work well with fade jobs since you can't use the clear-coat reducer described in this technique.