When one side takes the whole period back
A bullish engulfing is a down-candle followed by an up-candle whose body covers the previous body entirely. Bearish engulfing is the reverse.
What it records: the second period completely reversed the first. Everyone who entered during that down-candle is now underwater, in a single period.
That is a genuine momentum event — more decisive than a rejection wick, because the reversal held to the close rather than merely happening intraday.
Body, not range
The definition is about bodies, not highs and lows. A candle whose body engulfs the previous body qualifies even if the wicks do not.
This matters because the popular version — requiring the whole range to be engulfed — is far stricter than necessary and rejects most valid signals. The body is where the open and close are, and those are the two prices that represent decisions.
The four checks
1. Body size. The engulfing candle should be meaningfully larger, not marginally. A body covering the previous one by one pip is a technicality.
Compare it to the last ten. If it is roughly average size, "engulfing" is describing a coincidence of two small bodies, not a momentum shift.