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The International 10-20 System of Electrode Placement is the most widely used method to describe the location of scalp electrodes. The 10-20 system is based on the relationship between the location of an electrode and the underlying area of cerebral cortex. Each site has a letter (to identify the lobe) and a number or another letter to identify the hemisphere location. 
  The letters used are:  "F" - Frontal lobe, "T" - Temporal lobe , "C" - Central lobe , "P" - Parietal lobe, "O" - Occipital lobe. (Note: There is no central lobe in the cerebral cortex. "C" is just used for identification purposes only.)
Even numbers (2, 4, 6, 8) refer to the right hemisphere and odd numbers (1, 3, 5, 7) refer to the left hemisphere. "Z" refers to an electrode placed on the mid line. The smaller the number, the closer the position to the mid line.
"Fp" stands for Front polar. "Nasion" is the point between the forehead and nose. "Inion" is the bump at the back of the skull.
The "10" and "20" (10-20 system) refer to the 10% and 20% inter electrode distance.

When recording a more detailed EEG with more electrodes, extra electrodes are added utilizing the spaces in-between the existing 10-20 system. This new electrode-naming-system is more complicated giving rise to the Modified Combinatorial Nomenclature (MCN). This MCN system uses 1, 3, 5, 7, 9 for the left hemisphere which represents 10%, 20%, 30%, 40%, 50% of the inion-to-nasion distance respectively. 2, 4, 6, 8, 10 are used to represent the right hemisphere. The introduction of extra letters allows the naming of extra electrode sites. (Note: These new letters do not necessarily refer to an area on the underlying cerebral cortex.)