It does depend on your lo's personality, and how they handle getting off to sleep. I think what Tracy means is that if you put them down after the 3rd yawn, it will be extremely difficult to get them off to sleep and will be overtired/overstimulated.
With my lo I had to catch him before the first yawn, ie at that point I would have reduced stimulation and would be swaddling him, so that by the first yawn I was ready to take him upstairs. By the start of stage 3 you should be putting him into his cot, rather than begining your wind down.
HTH.
Any other comments anyone?