When practicing yoga there is a few points you will want to keep in mind regarding attire.
If your clothes restrict your movement you will find it much more difficult to move. Fluidity of clothing will encourage fluid movement.
The best style of clothing for yoga is athletic gear. Form fitting athletic gear encourages movement and does not droop or drag. This is crucial as you do not want clothing getting tangled in your movements. Also ensure to avoid anything that makes a noise as you move as this will disturb the tranquil yoga experience.
The other ideal thing about athletic clothing is that is doesn't hide the body, this is an important point as you want to ensure that you/your teacher/your partner can properly see alignment and the posture of your poses.
You will also want to use athletic gear for its anti-sweat properties.
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Again these fabrics are designed for athletes, to reduce sweat and to prevent odours forming in material. Many people choose to do yoga in cotton gear, I find this less than ideal as cotton absorbs odours and makes you sweat more.
The final words I want to add to this section is that you don't need to take my advice on this, I just find it is the best practice for the optimum yoga experience. It goes without saying that all jewellery etc. Should be removed as well.