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I was taught to leave a blank line between two paragraphs but not indent the first line of the next paragraph. I noticed that many people seem to not leave the line and choose to indent instead.

Is there a convention for this or is it entirely personal preference?

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Related, possible duplicate? writers.stackexchange.com/questions/3152/… –  Lauren Ipsum May 30 at 14:38
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I believe the most common convention for fiction is no blank line and an indent, then when you have a section break in your story you would have a blank line and no indentation –  CLockeWork May 30 at 15:16

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It depends on what exactly you're doing.

For print

the usual convention is to indent the first line of each paragraph, except for the first paragraph in a given section, with no blank line between paragraphs. This is primarily because adding in those blank lines would increase the number of pages used, and therefore make things more expensive to produce; many people also find this more pleasing to look at. If you were, for example, self-publishing a novel, you would want to follow this standard or risk looking like a complete amateur.

Reports in the office and so on will often be just as you describe, mostly because that is the default of word processors. This is also makes it easier to put notes around the edges in the extra space, which is why many schoolteachers prefer it. In both of those cases, the most correct thing to do would be what is expected (unless you really feel like making a stand on aesthetic grounds).

The web

(and email and other associated media), with no space limitations, tends to use the blank-line-and-no-indent form. Similarly to office reports, this is mostly because that's the default; some websites prefer to emulate print texts, but they have to make a conscious choice to do so. I personally find them both equally easy to read, and prefer indented text to look at; this is the realm of personal preference, really.

Ebooks

mostly seem to copy the web (yes, even those from big publishers), again because this is the default. I think that indents would be better here, for the reason of putting more text on the 7" screen of the average ebook-reader; but this also comes down to personal preference. The medium is too young for there to be established conventions.

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+1 for print versus web. Hope you're okay with my readability edit, otherwise roll back. –  what Jun 30 at 8:09

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