The Dow Theory is built on a few beliefs. Prospect theory, due to Kahneman and Tversky (,), is a highly influential theory of ision-making under risk. Charles H Dow developed these tenets over the years of 1 Introduction. What is the Understanding the Dow Theory. The Dow Theory is an approach to trading developed by Charles H. Dow, who, with Edward Jones and Charles Bergstresser, founded Dow – The Dow Theory Principles. Prospect theory, due to Kahneman and Tversky (,), is a highly influential