Edit in JSFiddle

var currentItem = -1;
var direction = 1;

$(document).ready(function(){
    switchItem();
    setInterval(switchItem, 5000);  
});

function switchItem(){
    currentItem = (currentItem+1) % ($(".parent .child").size());
    // hide the visible one.
    $(".parent .child:visible").fadeOut(500, function() {
        //now that the hide is done, show the current one.
        $(".parent .child").eq(currentItem).fadeIn(500);
    });
}