How To Haggle
Here are the essentials:
1. It's not about you. It's about the price of what you are haggling about.
2. You must be prepared to buy it.
3. You must be prepared to walk away.
Those 3 points are the laws of haggling and you should follow in order to practice, get better at it, and _last_ purchase.
Point 1 is often spoken of, yet it is difficult for many people. They get psychologically trapped, they get embarrassed, they are intimidated, etc. I will type about the "power of circumstances" somewhen but, for now, consider only this: if whatever makes you unconfortable (real or imaginary), walk away.
However, if you do want to get better at haggling, then practice. You don't have to make eye contact if you don't want to. You can look out the window, you can look at the object you are buying (is it fvcked somehow?), you can close your eyes and sing yourself a song. Who gives a sht. I suggest you haggle for its own sake and buy little things first and then move on to others. Do remember that haggling in a market is completely different than haggling in a bank or when buying a house. This post is about basic haggling not about buying a car.
So. You are ready to haggle. How do you go about it? Well, first, find out the "real" price of something. You do this by deliberately failing to buy that something. Imagine you are in Guatemala in a local indian market. You want to buy one of those pretty handbags. Most shops have them. How much are they "really" worth? Well, ask in one shop for its price and offer back in return 5% of what they ask for. The fellow will drop some. You increase some, that is, 1% at a time. He must always drop far more than you increase. The purpose of the exercise is to make it impossible for the fellow to sell you the item. However, he will go as low as he can to sell it to you. When the fellow does not lower anymore, walk away because you have an idea of what that item costs, more or less. Do it a couple times more in other shops and you will get a better idea of what the item actually costs. Once you know the real price, find a handbag you like and buy it when you get the fellow to the "real" price range.
If at any point you feel you are being intimidated or pressured to buy, walk away. Don't encourage that kind of behaviour. In fact, the worst a shopkeeper behaves the louder you say what a bad area of town it is to buy as you walk away via nearby shops. You would be surprised how much of an effect it has. The community will turn on the ugly shopkeeper. I've had more than a few shops change owners in this way.
Be also aware of children as sellers. They are great as kids and you will have quite some fun playing shop with them. But some will cry claiming to be bad at haggling (real or not). Comfort them but don't buy from these kids. Again, don't encourage this kind of behaviour.
One last word on haggling (although I've only scratched the surface of the topic), societies where haggling is common practice associate prices with social status. What this means is that a person that is wealthier will pay more for the same thing that a person that is poorer. Therefore, what's important to understand is that, in the eyes of the locals, you look like an absolute arse trying to haggle to death for, say, a bracelet. You may think they laugh behind your back because they are overcharging you when, in truth, it is the precise opposite. The equivalent of a couple of cents (of a dollar or euro) are nothing to you and they know it. So, get over yourself and pay according to your status.
Generally, I find out the "real" price and then pay what I would consider a bargain in whereever is my current home. As a rule of thumb, one third... but it varies. Also, remember that you are not only buying, you are also helping out the local economy. Don't be stingy.