There are two ways to use your TarDisk in an "encrypted" way.
Option #1: If you choose to "Pear" your TarDisk so that your Macintosh HD gets larger, your TarDisk will automatically be encrypted in such a way that it can only be read by the computer it is "Peared" with. (For example if someone were to steal your TarDisk from your "Peared" computer while you were not looking, and then try to read the files from a 3rd party computer, they would be unable to do so* without access to the original harddrive inside your MacBook.)
Option #2: If you choose not to "Pear" your TarDisk and instead choose to run it as a secondary volume where your manually assign files to it, you can enable a password for just the TarDisk using DiskUtility.
Disk Utility for Mac: you can encrypt and protect the volume with a password. If you encrypt a TarDisk, you must enter the password whenever you restart your computer. To encrypt and protect the volume with a password using Disk Utility, you can Control-click the disk in the Finder and choose “Encrypt TarDisk.” Select the volume in the sidebar, then click the Erase button.
If the volume contains files you want to save, be sure to copy them to another volume. Choose Mac OS Extended (Journaled, Encrypted). Enter a password when prompted.
To prevent the previously contained files from being recovered, click Security Options, use the slider to choose how many times to write over the erased data, then click OK. Writing over the data three times meets the U.S. Department of Energy standard for securely erasing magnetic media. Writing over the data seven times meets the U.S. Department of Defense 5220-22-M standard. Click Erase. To change the password for your TarDisk or TarDisk vpartition, select it in the sidebar, then choose File > Change Password.
*Disclaimer: Hackers are constantly evolving, and you need to closely monitor the security of your data.