How do you perform a 3 point edit?
You mark an In-point and an Out-point in your source panel and insert it in between two clips.
The 3 point edit is when you add a in point and an out point in the source panel. Then in the timeline panel you add a in point.
In a four-point edit, you mark source In and Out points and sequence In and Out points. The Source and Program Monitors provide controls to perform three-point and four-point edits, standard techniques in traditional video editing.
Δ
Multimedia Production 
You mark an In-point and an Out-point in your source panel and insert it in between two clips.
The 3 point edit is when you add a in point and an out point in the source panel. Then in the timeline panel you add a in point.
In a four-point edit, you mark source In and Out points and sequence In and Out points.
The Source and Program Monitors provide controls to perform three-point and four-point edits, standard techniques in traditional video editing.