I think it's worth mentioning here that faded cichlids possess the trait in a spectrum that can vary from white to red, with orange being the most common. I have put white parrots with orange parrots and have had them turn yellow, and, most commonly, I have faded batches of parrots that come out yellow and added purple parrots to make them all orange. It is clear to me that environment is at least a significant predictor of fade color. Other breeders have told me that things like adding salt or raising the temperature can have an effect on the colors faders fade to, and this of course supports this theory. From what I have heard, parrot breeders may have created the "purple" parrot strain by giving fish red-enhancing hormones or dye, and then breeding them with the current stock. People may think this wouldn't work, as the red change is not changing the genes of the fish, but the color of the parents could potentially effect an epigenetic change in the sucessive generations, if the fry are not artificially reared. In fact simply introducing dyed fish into a population may increase the color of the group. Fish may change color in the wild in order to identify with a group, and this would be supported by the fact that coverage of the fade color indicates societal rank.
Many methods are probably used, hormones seem to be quite common and I would personally warn against buying any fully faded red texas under at least 3 or 4 inches in size.
But different methods may be possible. Red gravel is commonly used and has a mild effect. Different mineral content in the water, temperature, etc, as well as different environmental factors may be useful as well.
