When I first started my yoga journey all arm balances seemed impossible to me. If you have been reading my blog for a while you will know that I have two metal plates in my right arm and several pins from a horse riding accident when I was 15. So first and foremost for me when it came to arm balances the fear factor was there big time. I didn't think I was strong enough, which of course was complete rubbish!
As you progress in your practice and gain strength, flexibility and the ability to quieten those negative thoughts you will find that poses which once seemed impossible are indeed possible. Of course this pose is by no means easy and I think one of the key factors is the twist, so make that your first focus. Perhaps stick with step 2 for a while until you can go deeper into your twists, in the meantime keep working on your crow pose.
When you are ready to take it into steps 3 and 4, use your core muscles to lift and keep your gaze forwards. Have a play around and see where it goes!