Textile electrodes have become popular in recent years for their good skin sensorial comfort and their good integration with clothing, which offers great potential for sensing of signals for wearable end uses. However, in comparison with wet electrodes, dry textile electrodes have much higher and unstable skin-electrode impedance, which could introduce differential noise in signals and cause difficulties in results and diagnosis. To solve this problem, this paper is focused on determining the reasons for this phenomenon and optimizing the performance of textile electrode. Several factors have been examined and the results indicate that the skin-electrode impedance performance is very sensitive to changes of electrode position, size and holding pressure. The fabrication of textile electrode and its optimum holding pressure and size are also described in this paper. Through the implementation of electrocardiogram (ECG) measurements, it was demonstrated that when the electrode size and holding pressure are optimized, the textile electrodes can achieve similar signal performance as wet electrodes.