Post a Comment Print Share on Facebook

Outside Wall Street, inside Dubai

Anyone who is on Instagram, YouTube, Facebook or TikTok often comes across offers that sound tempting: from weight loss powder to lucrative investments.

- 2 reads.

Outside Wall Street, inside Dubai

Anyone who is on Instagram, YouTube, Facebook or TikTok often comes across offers that sound tempting: from weight loss powder to lucrative investments. In our series, reporter Judith Henke takes a look at these products. What is behind it, how serious are you?

***

A total of thirteen car keys lie on a bright surface, for the photo the influencer arranged them in a circle. A not very down-to-earth Instagram story. Anyone who follows the young man's profile for a longer period of time will soon find out which luxury cars his keys belong to.

It's just a shame that he can't exploit the full potential of his Lamborghinis. Because, as befits a real influencer, the young man lives in Dubai – and there, unlike in Germany, there is a speed limit.

Dominick Toelen, the full name of the car enthusiast with the nickname "trading_dom", seems to have had too much money at a young age. His profile explains why: He describes himself there as an expert in day trading - i.e. short-term betting on rising or falling prices for stocks, currency pairs or cryptocurrencies.

Together with his colleague David Franke, he founded a company to share his knowledge with investors. "Wall Street Story" - that's the somewhat uncreative name.

The company's website is all the more spectacular. Among other things, memberships in Telegram groups are advertised there, in which Toelen and Franke give current trading tips – so-called signals.

Wall Street Story promotes these chat groups as if they were the holy grail of investing. "Maximum profits" is what the website says, and further: "Get razor-sharp forex signals with precise entry levels", to name just two examples. There seems to be a myriad of adjectives that all describe how wealthy investors can become from trading tips.

And best of all, customers do not need any previous knowledge. “All you have to do is transfer the position to your trading software. So you just need to know how to operate this software. That's all," the website said.

That sounds promising – but is it true? As a beginner, can I really just blindly take over the signals for my own trading portfolio and drive a Lamborghini in a few months?

I speak to four former Wall Street Story clients and get a rather conflicting impression.

For example, an anonymous customer, whom I call Lisa Meier in this text, lost around 2,000 euros while trading.

In the middle of last year, she bought access to the signal groups for 500 euros after an acquaintance raved about it. But as a beginner, she felt left alone because there was a lack of information to really invest sensibly.

Screenshots from one of the signal groups show what she means: The signals consist of the currency pair, an entry price is given and the prices at which investors should set their stop loss and take profit. But what is missing is information on risk management and position size.

A brief explanation: if an investor bets on a rising price, for example, he uses the stop-loss order to set a price below the current price. If this mark is reached, a sell order for the security is triggered.

This limits his losses. In the example, the investor places the take profit order above the current price. If the set price is reached, the position is automatically closed - and the investor takes the profits.

But what is not specified in the signals: how much money the investors should put on this price bet - and what leverage they have to choose. Because in the case of short-term price bets, the investor usually only deposits collateral with the broker, which amounts to a fraction of the price.

An example: The price of the share is 100 euros, but the investor only deposits a security of 10 euros. He bets on rising prices. If his bet is successful and the share increases by ten percent, the investor can take his invested ten euros and another ten euros profit with him.

However, if the share were to fall by ten percent, the investor not only loses the ten euros he has invested, but also another ten euros because of the drop in price.

The higher the leverage, the higher the profit, but also the risk of a large loss. This is not easy for beginners to see through. "I chose far too large leverage and risked a large part of my capital for each position," says Lisa Meier.

Now, like the other three clients I spoke to, Lisa Meier is trading without the help of signals from the Wall Street Story group. And is more successful because she has informed herself how short-term trading works.

Experts also advise beginners to never blindly rely on third-party trading signals. "With a lot of knowledge and hard work, money can be made on the capital market, but investors have to educate themselves for this," says Peter Scholz, professor of business administration at the Baden-Württemberg Cooperative State University in Mosbach.

Investors should never invest in a financial instrument or trading system that they do not understand.

To show how risky it is for a beginner to blindly follow the advice of others, Scholz chooses a comparison: "Who would voluntarily sit in a modern airplane and only want to fly it with instructions from a loudspeaker coming from someone who is not on board?” After all, it is not the tipster’s money that is at risk in these trades.

Daniel Bauer from the Protection Association of Investors doesn't think much of the concept either, even calling it "dubious." Investments should never be made without prior knowledge, especially since foreign exchange trading is one of the most complex markets.

He also doubts that the trading tips give investors an edge. "Because all other traders have the 'signals', regardless of whether they are derived from fundamentals or charts, and the exchange rates react accordingly quickly."

If a trader were to receive a signal on his mobile phone, he may have already missed the entry because the price has already reacted.

Do the founders of "Wall Street Story" know that they have not brought "maximum profits" to all their clients with their "razor-sharp forex signals"? I ask - and co-founder Dominick Toelen answers me in detail. He gives insight into the advertising promises.

"The website came into existence quite early in our entrepreneurship," he writes. Of course, these formulations are somewhat misleading. "We have to admit: This is no longer up-to-date and no longer fits our image."

Surprisingly insightful - but until now I haven't been able to see that the advertising promises have been removed from the website. Toelen also comments on the criticism of the customers I spoke to.

He confirms that no leverage and position sizes are specified. Because that would be unprofessional. Position size and leverage depend on individual factors such as the financial situation or the experience of the investor.

In any case, beginners should not trade based on signals, emphasizes Toelen. They would never recommend that either.

Toelen also admits that there can be a delay between the signal and the customer's trade. "In general, we try to enable a certain entry range with our signals, which puts it into perspective, having to get the exact entry point."

That all sounds a lot more moderate than the over-the-top advertising on the website, I have to admit. But not only there, but also on their Instagram pages, the “Wall Street Story” founders Toelen and Franke are happily doing self-promotion – and they don’t seem modest either.

Every once in a while, they'll post trades that went particularly well on their Instagram stories. Under the story highlights on Dominick Toelen's profile under "Trading Results" I find several screenshots that he took of his depot.

What is striking: He is trading profitably – in February 2020 he made profits of more than 10,000 euros. From early to mid-April, he seems to have earned more than 3,000 euros.

Quite impressive - surely all the lucky investors who are in his forex signal group must have benefited from it.

I ask a former customer to check the group to see if he has passed the trades from his history there as a signal. But that's not the case - he only tipped off a subset of his own trades to his investors.

According to the four previous customers, such contradictions are not isolated cases. "I saw him give a signal in the group for a bet on the price going down, but on Instagram after the trade was completed he bragged about how he successfully bet on the price going up," says Lisa Meier.

As a customer, she increasingly felt cheated – especially since her own trades were mostly loss-making.

Dominick Toelen emphasizes that signals are rarely contradictory. And if so, then different time horizons are often meant there.

Many of the signals would come from technical analysis, but on social media he would often offer his own views independently.

In addition, the "Wall Street Story" founders never claimed that they communicated each of their trades as a signal in one of the groups. That is simply bureaucratically impossible and would also lead to the groups becoming confusing.

But I see more contradictions. In a freely accessible Telegram group, Wall Street Story advertised FTX last year, writing that they would work with the crypto exchange.

Now, after the sudden bankruptcy of FTX, "Wall Street Story" founder Toelen verbally shoots at the company in his Instagram stories.

I think some of the posts have quite a smack about it. Toelen uploaded a screenshot of the Wikipedia article on FTX founder Sam Bankman-Fried.

It's a snippet of text, five lines long. It reads in English: "Born and raised to an upper-class Jewish family in California, he is the son of Barbara Fried and Joseph Bankman, both professors at Stanford Law School."

Toelen wrote: “No more questions. What a freak show. In hindsight, everything shines brightly.”

Does that refer to the fact that the FTX founder comes from a Jewish family? I ask for. He denies that. "My concern was that executive decision-makers come from the elite universities, which we often consider unapproachable but, even here, do not always have the best intentions for the common good," he explains.

FTX has also stopped recommending “Wall Street Story” for a few months because some users were dissatisfied with the platform and usability.

So did I overinterpret something? In another Instagram story, Toelen writes: "I'm not a crypto friend." The reason: he woke up. A film opened his eyes.

Because it shows "impressively how our world works and how few people, the 'elite', have a finger in the pie." Which elite? He provides the answer in another Instagram story: "Rothschild, Morgana, Rockefeller. They stand behind everything.”

I'll leave that alone. Anyone with a bit of historical awareness can think of their part.

By the way: In view of the fact that Toelen is now such a big crypto opponent, he has quite often advertised a crypto currency with “Wall Street Stories” in the past: PLC Ultima.

If this name sounds familiar to you: I researched this crypto coin a few weeks ago. My verdict at the time: hands off.

However, Wall Street Story seemed to have less qualms about recommending PLCU as an investment product. In the meantime, that has changed, as Toelen writes to me. They are now quite averse to similar systems and companies.

However, they would also try to be transparent and explain to their clients what investments they are making. "We don't recommend any investments that we don't use ourselves," emphasizes Toelen. In addition, they would always clearly point out the risk.

Luckily the four former clients I spoke to didn't invest their money in PLCU. For this they send me a spreadsheet that another customer kept. Between January and May of this year, he began replicating every trade from the crypto signals group on paper.

Assuming starting capital of $10,000 and a 2% capital investment per position, he calculated a loss of more than $2,000.

"Losing months are part of the business," Toelen writes to me. In addition, the signals they communicate have to work well – otherwise there will be problems. In your own trading, losses could be limited by intervention mechanisms.

"Communicating these complex techniques in a group is, in terms of practicability and overview, the purest horror." Nevertheless, the "Wall Street Story" founder believes that the calculated loss phase of 20 percent was a bit too large - and five months not representative either period in trading.

In addition to the Telegram groups with the trading signals, there is another “Wall Street Story” offer: online learning courses. A previous customer tells me she bought the Wall Street Story Trading Masterclass for around 3,000.

The course is said to be "the best and most successful complete education ever" and contain the "entire trading knowledge".

However, according to the customer, the price-performance ratio was not right. It starts with formal things: There are spelling mistakes on the Power Point slides and the sound quality often leaves a lot to be desired. She would also have liked more content and fewer motivational speeches.

Niels Nauhauser from the Baden-Württemberg consumer advice center generally advises against taking day trading courses. "The courses are never worth the money they cost," he says. "It's not for nothing that the pseudo-experts sell overpriced courses instead of spending their time solely on increasing their own money with the trading strategies they propagate."

Dominick Toelen from "Wall Street Story" naturally sees things differently. The master class offers the best trading training in the German-speaking world. Hundreds of people would trade successfully in the stock market through "Wall Street Story".

Incidentally, the course now costs a whopping 6,000 euros.

It doesn't matter whether it's lucrative investments, dental splints or coaching offers: anyone who uses social media is overwhelmed with product recommendations. What's behind it? How serious are you? You can find out in our podcast "Die Netz-Checkerin". Subscribe to Spotify, Apple Podcasts, Deezer, Amazon Music or directly via RSS feed.

Avatar
Your Name
Post a Comment
Characters Left:
Your comment has been forwarded to the administrator for approval.×
Warning! Will constitute a criminal offense, illegal, threatening, offensive, insulting and swearing, derogatory, defamatory, vulgar, pornographic, indecent, personality rights, damaging or similar nature in the nature of all kinds of financial content, legal, criminal and administrative responsibility for the content of the sender member / members are belong.