My pattern says “yfwd K3”. How can I knit with the yarn in a forward position??
Take the yarn over the top of the needle which will make a YO. In this instances yfwd = YO.
Yes, it is just a yarn over. If you knit English style just bring the yarn to the front between the needle tips and knit the next stitch from there. It can be done; 
and it will automatically make the yarn over for you.
If you knit Continental, bring the yarn to the front between the needles, then what I do is hold it against the top of the RHN with my right index finger. The yarn is kind of behind again and feels more like a regular knit than it might with English knitting. Yarn over formed as you knit the next st.