How velocity is been calculated in the Team Velocity Gadget Dashboard if we set Calculate Average Velocity based on last 3 Sprints and calculate by Issue Count?
Are you asking about the gadget provided by this vendor?
https://brokenbuild.atlassian.net/wiki/spaces/VEL/pages/1454080001/Team+Velocity+Chart
If so then the calculation for the Average line is described on this page:
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