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Can you describe how each step builds on the previous one?
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Observing what you are reading takes a lot practice. I know I can read what I see. Observing the readings for me has to be slowed down. You have to go through it with a fine tooth comb.
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When we observe, we look closely into the verses, e.g. noting the repeating words used, or the phrase or the place, time or person saying it etc. These details gives us the parameters to what the author is trying to say to the original audiences. With this knowledge, then we can interpret the meaning accurately and holistically. Having done that, we can ponder on how I can apply it to my current situation, or any changes I need to make to my current lifestyle etc., which is the application part. If I don’t observe closely, I would misinterpret the meaning and thus cannot correctly apply the principles or teaching into my life.
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We observe, interpret, and apply what we’ve learned.
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Observing is looking closely at what you’re reading. Interpreting is gathering and processing the facts and information. Application is using what you’ve learned in your every day life.
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One Observes to know what they are seeing. Then, with clear observation comes sound interpretation. Finally, sound interpretation is an indispensable key to properly applied action.