We use Past Simple for completed actions in the past, and we use past continuous for actions that were in progress and not yet finished at a certain point in the past. In addition, a short action in the past simple often interrupts a long action in the past continuous.
Action in progress
- They were arguing when I saw them yesterday.
- They were swimming at 7 in the morning.
Describing a longer action
- When I met Susan she was having a drink at a terrace with a friend.
- We didn’t go out because it was raining.
- He was playing football when he broke his arm.
- When I went to bed, it was raining.
Describing the beginning of a story
- It was getting dark, and I was walking fast. Suddenly …
- Last night I was walking home and listening to my ipod when …
- The sun was shining and lots of tourists were lying on the beach. Suddenly …
References