Applied I-cord edge help?

Pattern reads: cast on 4sts, slide sts to opposite end of needle, pulling yarn across back of work, k4. Beg at center back of heel with RS facing, pick up and knit 1 st along edge of slipper-- 5 sts.

Work applied I-cord as follows:

K3, k2tog (last st on needle an picked up st), pick up and knit another st from edge of slipper; rep from around top edge, skipping a row of slipper when picking up sts as needed to keep edge flat.:

Okay this is like a foreign language to me. If I do what the first paragraph asks, then pick up and knit picked up, when I move to the second paragraph the last 2 sts do not include my picked up st. This leads me to assume I’m doing it wrong… Plz help me someone!

" cast on 4sts, slide sts to opposite end of needle, pulling yarn across back of work, k4. Beg at center back of heel with RS facing, pick up and knit 1 st along edge of slipper-- 5 sts."

[I]What’s missing I think is that you should slip the 5 sts to the other end of the needle, pull the yarn across back of work and then: [/I]
K3, k2tog (last st on needle and picked up st), pick up and knit another st from edge of slipper; rep from around top edge, skipping a row of slipper when picking up sts as needed to keep edge flat.: