A common video indexing technique is to segment video shots by identifying scene changes and then to extract features. This paper discusses a novel algorithm for detecting fade-in and fade-out using statistical features of both luminance and chrominance signals. The ratio between incremental change in the mean of the luminance signal to the chrominance (average sum of Cr and Cb) is considered to identify fade-in and fade-out. Results show that the algorithm is capable of detecting all fade regions accurately even the video sequence contains other special effects.