There are at least two different markets in Luxor. One is located in an air-conditioned hall, with shops located on either side of the hall. This market hall connects two major streets.
The older market takes up several streets near the Luxor temple. It is a joy to walk through, as it is mostly pedestrian and is a welcome respite from the horse and carriages on the main streets. This market really feels like an old souk and the visitor is taken back in time. It is covered with a wooden trellis, shading people from the sun. Many of the shops offer the same items, so the wise buyer shops around and looks for the best price. One can often bargain better after going to several stores.
Once you find a merchant you like, sit down, have some tea, and begin the game of bargaining. It can feel like you are becoming a part of the family. Buying something as simple as a cotton galabeya can take hours, as you try on almost every single galabeya in the store, and then move on to items that they think you may want for the rest of your family.
Buying anything may be very frustrating due to constant bargaining if you are not used to it. This trick has proven to work well: usually their first offer for the price can be ten or even a hundred times bigger than a reasonable price. First decide what you are actually willing to pay. Let us say that in this example it is 20LE. If you ask for the price, you may get a reply "120LE". Now you offer 22LE. You may then be offered something like 110LE. Then instead of going up, you start going down with the price, your new offer will be only 20LE your predefined price limit. If the bargaining continues you continue dropping your offer. Pretty soon he will understand where the bargaining is going and you get a comfortable price or - at least - you get rid of the vendor.
The touting in the main Souq in Luxor is so bad that it is an absolute nightmare walking through it. Any desire you had to buy anything will quickly disappear as dozens of men try every possible catch they have on you. These include: "You look lucky," "you look Egyptian," "come see my shop, no hassle," and guessing your nationality. But if you continue straight forward, you will come to the real Souq, where the locals go shopping - and suddenly the atmosphere changes completely.