I suppose this question is more directed towards price action junkies. Engulfing bars are used to signal reversals, and my understanding is that most PA traders enter on the break of the engulfing bar, using the break as confirmation. But where do you put your stop loss? If you put it at the opposite end of the bar, that can be a huge SL! Any thoughts? 
Personally yes, I would place it a few pips south (or north, for a Short!) of the other end of the bar - we will (or should) all have rules for just how many pips. You are quite right that that can sometimes lead to a large SL, but that again should be taken into account within any effective trading approach.
Some traders won’t take a trade that needs a Stop larger than a set number of pips, so that in itself can be a reason not to consider a setup valid. Others will take any size of SL as long as their account is large enough to cover it (for instance, personally I risk 1% per trade, so it is easy for me to see how many pips I can cover as a Stop) and as long as the R:R is where they want it to be (in my case 1:1 or better, some people target a minimum of 2:1, you will already have your own view).
A 200 pip Stop can be fine targeting 500 pips on the Daily chart, but is suicide if targeting 20 pips off the 5 minute chart (imho!).
So basically my view is that you are correct that some setups will need a larger Stop than others, and a successful trader will have rules within their strategy to tell them what to do in that situation.
I hope that that gives you some insight into one approach to this. There are lots of subtle factors at play when determining Stop placement, so I expect that you will get a range of views on here.
ST
Good commentary from ST that I agree with. The other point to bear in mind is that you shouldn’t use engulfing bars on their own. You need to apply S&R, pivots or other factors that give you more reason to take the trade. Also the time frame at which you get an engulfing bar is critical. All being said, I personally use it to gauge sentiment but not on it’s own to trigger a trade.
Good point, mrchilled. I usually look for price signals around resistance/support. Sometimes I notice that when an engulfing bar does form at one of these levels, it closes halfway towards the previous resistance/support level, offering poor R:R ratios. I think ST made a good point in saying to ignore setups with poor R:R.
(And obviously I was just addressing your specific question, I would echo mrchilled in saying never just trade an inside bar in isolation - I personally look for at least four different factors to be in allignment before entering a trade)
These men are correct…
I haven’t traded engulfing bars on their own but used them together with other signals.
But I would guess that if you wanted to trade it by itself or don’t know where to place SL even when used with other factors…
Then I would think going to a lower time frame would let you find a good entry and shorter SL.