If you cut a clip and put cross dissolve on the cut you’re not going to see anything. You’re basically cross dissolving through one video back to itself. As each frame fades out it’s being replaced by the same frame that’s coming back it.
If you want to make a dissolve at a shot change you have to ripple the shots back to create handles so that you’re going from one shot to another and not just back to itself.
See if this explains it for you and tells you want you have to do
https://www.fcpbook.com/Effects1.html
All the best,
Tom
Class on Demand DVDs “Complete Training for FCP7,” “Basic Training for FCS” and “Final Cut Express Made Easy”
Author: “Final Cut Pro 5 Editing Essentials” and “Final Cut Express 4 Editing Workshop”