A little help designing a pattern?

I’m trying to knit a skull cap for a good friend of mine with a star and crescent (the symbol of his fraternity) on it. I’ve been told that http://www.tata-tatao.to/knit/matrix/e-index.html this site can be very helpful when designing a pattern. So my question is, when I’m counting the stitches for sizing, am I counting the ones that are on the needle still, or the ones a few rows down and aren’t still on the needle?

Thanks so much for all the help!!

Just like you don’t count the CO as a row, you don’t count the sts on the needle as a row. They were put there when you knit the previous row and won’t really be sts until you work across them.