which one is the correct sentence between the two and why?
Before I lost my job, I was working on some important projects.
Before I lost my job, I had been working on some important projects.
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Past progressive means actions performed or occurred at a certain moment or a certain period of time in the past. Its form is was /were + V-ing. It is often used with adverbials of time in the past, such as: last night, last Saturday, etc.; or used with adverbials of past time guided by when, while, and as.
example : We were watching TV from seven to nine last night.
The Past Perfect Progressive Represents actions that have been performed before a certain time in the past. example: I had been looking for it for days before I found it.
you shuold use the past perfect progressive
Both are possible:
If you were working on a project it means that during a period of time, before you lost your job, you were doing the project, which was a temporary thing.
If you had been working on the project it emphasizes a longer period of time, even though the duration is not mentioned. It could also mean the work on the project had stopped before the job was lost.