The wick decides nothing until the pattern has already passed

Engulfing arguments happen because there are two separate questions in play. Is this candle pair a valid pattern? And where do I draw the line it produces?

Those have different answers. The first is settled by the bodies. The second is settled by the extremes, wicks included. Say the word wick without saying which question you mean and the advice comes out backwards.

The damage is specific. Traders who use wicks for the validity test call every long tailed candle an engulfing. They take shapes that were never patterns in the first place. Traders who use bodies for the level draw support at a close. Then the tail hanging underneath it stops them out. Same confusion, two different ways to lose.

A bullish engulfing is a small down candle followed by an up candle whose body covers the prior body completely. Body means open to close. Draw two rectangles and check whether the second one contains the first one. That is the whole test.

Try it with numbers. Candle one opens at 101.20 and closes at 100.40, so its body runs 100.40 to 101.20. Candle two opens at 100.30 and closes at 101.35, a body of 100.30 to 101.35. The second body sits under and over the first, so the pattern is valid.

One more condition comes before any of that. Price has to have been falling into the pair. A bullish shape inside a rally is a strong candle and nothing more. Nobody was trapped short, so there is nothing for the buying to reverse. Check the trend first and you throw out half your pairs before measuring anything.

Bearish engulfing runs the same test in reverse, after an advance rather than a decline.

Once the pattern passes, the wicks take over. Support is the lowest low across both candles. In the example above that is 100.10, the tail on the first candle. The closes sit thirty cents higher.

The reason is what a wick is. Price actually traded down there and got pushed back up. A line drawn at the close ignores real trades and cuts a candle in half. Your stop then sits inside a range price has already covered.

So the sequence is fixed. Bodies decide whether you have a pattern. Extremes decide where the pattern lives. Your stop then belongs under the pattern low, with a close below it as the trigger. Bearish engulfing works the same way with the highest high of the two candles as resistance.

The first is the wick that fools you. Candle two opens at 100.30 and closes at 101.10, but spikes to 101.45 intraday. The chart looks engulfing, and the bodies say no, because 101.10 never covered 101.20. Skip it.

The second is the shape with no decline behind it. Three green days, a small red day, then a big green day. It draws the same picture and means nothing, because nobody was trapped short.

The third is the tie. Candle two closes at exactly the prior open. Nothing in the pattern definition covers an exact match. Pretending a rule exists there would mean inventing one. Treat ties as a no and take the next setup. Or size smaller if the rest of the context is strong.

Run these in sequence and stop at the first no. A single failed check means there is no trade to plan. The whole pass takes about a minute once the numbers are in front of you.