Continuity editing refers to arranging shots to suggest a progression of events and guide the audience through a story. It establishes temporal and spatial continuity through techniques like matching actions across cuts, following the 180-degree rule of camera placement, and using shot reverse shots or eyeline matches to make clear who characters are looking at. Graphic matching also helps smooth cuts by placing the focus in similar areas of subsequent shots. These techniques help audiences smoothly follow a narrative while breaks in continuity can create intended discomfort.