I need to be notified when an issue is transitioned from 1 status to another in the workflow. So when the issue goes from open to in development I need a notification and then from in dev to ready for testing etc.
Look at your workflow - there are transitions between status. Each transition has a post-function that says "Fire ... event", with the ... being replaced by a specific event name. You can edit these post-functions to select the event from the list.
If you look at admin -> issues -> Events, you'll find a standard list, but you can add new ones (like "Issue in development" or "issue ready to test"), which may be worth doing here - you can use any custom ones in your transitions.
Finally, go to the "notification scheme". You'll see that when you add your own events, they automatically appear on the notification list, so you can say things like "when issue in development is fired, email the role of developers"
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