Perched on a steep hill in the lovely neighborhood of Alfama, you will in no doubt leave with a great souvenir or gift. Sellers throw down blankets or rugs in rows and sell a variety of hand-made goods, antiques, books, clothes, military objects, etc. I took home two wonderful brass bottle openers and a couple of old world maps.
Getting to the market is easy and the trip there is quite beautiful; take the Tram 28, or Tram 12 up the hill through the tight, and narrow neighborhood streets (becos). After you've spent all of your Euro, take a short walk over to the Santa Engracia Church, Museum of Decorative Arts, or the National Pantheon. Oh, and don't forget to take in the views and snap a few pictures.
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A great bargain
Lisbon's flea market is every Tuesday and Saturday, from dawn to dusk. A myriad of small stalls sell all sorts of second-hand and new products, and other traders simply display their in front of their stores to attract customers. I got this wooden man on his unicycle for 8 Euro.