This article is a travel topic
Pickpockets are thieves who steal items (often wallets or passports, sometimes other valuables) from people's clothing and bags as they walk in a public place. Pickpocketing is a very old crime that is continually being reinvented. Pickpockets are a hazard in nearly any tourist destination. After all, tourists, by definition, have disposable income, and are likely to be carrying some money and/or valuables.
This article covers only pickpockets, not the various other crimes that may be committed against travellers. See Common scams for some of them.
There may be pickpockets anywhere, but some things are signs of higher risk:
Traditional open air markets, especially those selling handicrafts in developing countries, combine many of the above risk factors and are often infested with pickpockets. A more modern place is around ATM's. Someone coming from them has money and an observer can watch where the money is put away.
Psychological experiments have shown that we tend to overestimate our ability to know if we are being pickpocketed. True, if someone approaches you from in front and reaches for your pocket, you can avoid them, but awareness threshold is usually much lower. In a crowd, for instance, your tolerance for being jostled will go up automatically and you will literally not feel it if someone reaches into your pocket. It is possible to cultivate alertness to counteract this, but it takes a real effort. If you are in a high-risk area and are not feeling somewhat jumpy, you probably are not trying hard enough.
Pickpockets use a variety of techniques, only some of them are covered here. Their methods and motivations are exhaustively described at Thiefhunters in Paradise .
A skilled pickpocket can hit almost any pocket, but all pickpockets prefer easy targets.
Ridiculously easy targets are away from the body where the victim will not feel a thief's touch:
Other easy targets are pockets that are easy to get at and out of the victim's field of vision:
Do not carry your wallet, phone, or other valuables in any of these places.
Tools for pickpockets
Pickpockets in many places routinely carry razors for slitting pockets. These may also be used to cut the strap on a purse, shoulder bag, or camera quickly. In some places, armed robbery is also a possibility. Check the country listings for your destinations.
Thieves commonly carry fairly long tongs for reaching into purses or pockets. These are not as large and noticeable as a hand reaching for the goods.
Most pickpockets employ some element of distraction. Various things common on the streets of tourist areas can be used:
Use common sense if you are confronted with a distraction. For example, no children typically approach strangers unless coached to do so by an adult. Fights and arguments are best avoided anywhere. Also, a person who finds or drops money on the street isn't going to offer it to you.
Pickpockets are not always subtle. Often, pickpockets use an element of physical force. For example, pickpockets might walk straight at and barge past the person they are stealing from and use physical contact as a distraction to take a purse or similar valuable item.
Pickpockets work in teams
Pickpockets often work in teams. For example, getting on a crowded bus, one ahead of you may create a delay so the one behind can get your wallet. One may distract the victim's attention while the other reaches into a pocket on the other side. The loot may be immediately handed off to a third player, so even if you grab the actual thief, there is no evidence and the item is lost. Pickpocket teams typically include both genders and both young and older people. Anyone can be a pickpocket, even women or other tourists.
More brazen pickpocket teams will work with 4 people who swarm from different directions to block you briefly. The person behind you then suddenly bumps or jostles you while reaching into your pocket and handing off what is found to another person. If you sense this happening soon enough, jumping and/or turning back in the opposite direction may get you out of the trap.
Criminologists Bob Arno and Bambi Vincent film and interview thieves and report on their methods and motivations at Thiefhunters in Paradise. 
The basics of protecting yourself are common sense:
Above all, do not flash your valuables around unnecessarily. An expensive watch on your wrist or fancy camera around your neck is quite a temptation to someone whose annual income may be less than its price.
Every second counts. As soon as you sense something is "off", get away from the area immediately. For example, an old lady carrying a sack suddenly stops directly in your way. Or a youngster sprays ketchup on you. Both are likely setups for pickpocket teams. Doing something unexpected (jumping, backing up and going the opposite direction or picking up your pace to get away) may be enough to get you away from the pickpocket's reach.
Learn "Thief!" in the language of your destination and be prepared to yell it if you notice a pickpocket at work. When confronted, most pickpockets will fling their booty to the ground and attempt to make their escape: it's probably best to let them go, as they may be armed and you don't want to get charged with assault or harassment yourself.
In some cases in a crowded environment, the people around will co-operate with you to at least attempt to catch the thief and report the loss to police and act as a witness. In most cases however, especially in non-Western countries, people will simply stand and do nothing, so don't rely on their aid. In many tourist hotspots in South East Asia and China the shop attendants and even security guards in the area will be in on the pick-pocketing, so don't fully expect them to help you either. You should, however, report any pickpocketing to the police as soon as possible, regardless.
In countries with notoriously corrupt police, avoiding confrontation with thieves is strongly advised. They know the language, the system, and the police much better than you do. They may be part of a gang with connections you cannot fight.
Money belts and pouches
There are many ways to stash your money and passport where it will be quite a bit more difficult to grab it.
Separate your money. Carry a small-change purse or keep a small amount of money in a pants pocket, for small transactions like buying a bus-ticket or an ice cream. Put larger bills somewhere else. Many travellers have 3 to 5 wallets with their money split so that if one or two get stolen, it does not cause too much trouble.
Many urban outfitter or mountaineering type shops sell a money belt that you wear under your pants. These are typically nylon and have many pockets, so you can have cash, travellers cheques and passport separated. This is probably your most secure option since it is hard for a thief to reach and is in a sensitive area of the body; you are quite likely to notice someone touching you there. The only disadvantage is that some people find them inconvenient to access. The luxury versions of money belts have straps with sewn in wires (or the whole belt is made of this material) and all connections are made of steel and are not easy to open. So it's not possible to cut these straps or snatch away the belt. However, you may want to avoid models that contain metal parts, since they will cause problems at security checkpoints.
The Clever Travel Companion  sells men's and women's underwear with secret, zipper closed pockets. Also they sell t-shirts and tank tops with built in pockets to hide valuables. The pockets can carry passports, money, credit cards, and even cell phones. It would be extremely difficult for a thief to steal from your under garments without you noticing.
Another type of money belt is just a zipper sewn onto the inside surface of an ordinary belt. These are OK for money, but not passports. They can be bought in some travel-oriented shops or are easily made. Use a nylon zipper; metal will cause problems at airport security.
Many travelers use a passport pouch hanging under their shirt. Again, this is a sensitive area of the body; you will likely notice activity there. Make sure it has a secure strap and be careful not to wear it on the outside of your clothing, where it would be an easy snatch-and-run target. Some pouches have a second strap that goes around your chest; with these it's not possible for the thief to snatch-and-run. Some travelers find the presence of anything around their neck to be a danger in itself, however. Others use a leg pouch worn under the pants or sometimes on the upper arm under a shirt.
In Africa it is quite common for women to store money and even cell phones in their bras. Again, you will certainly notice someone touching you in this area, and it's directly in your line of sight as well.
Some travellers use a drawstring shoe bag. These are cheap and are difficult for a thief to get into if the string is drawn tight. Also, the drawstring can be tied around your wrist when at a table to protect against snatch-and-run theives. Some contain inner pockets, so even if the bag is slashed, your valuables will be protected.
There are many ways a tailor can make clothing somewhat pickpocket-resistant.
Hong Kong tailors routinely put an extra pocket in a pair of pants, built into the waistband.
Simply adding fasteners (velcro, buttons or zippers) makes picking the pocket harder.
You can have additional pockets sewn into garments in odd places. Some possibilities are the following:
Some travellers have one garment they use for travelling such as a jacket for a businessman or a denim vest for a budget traveller, which has extra pockets and they almost never remove.
For ladies, a cleverly hidden pocket sewn into a wrap-skirt can work well. It is fairly easy to add a secure pocket to a pair of bike shorts or boxer-brief type underthings also.
It is best to leave a small reserve of money (for example, a large-value note) in the unlikeliest of places in case the worst happens. This money could then be used to cover a hotel room, transport, phone calls to your embassy, or something else. Suggestions include inside your sock or your shoe, your bra, paperclipped to your belt, or somewhere equally obscure. Be cautious about money inside a shoe: after a few months of trekking, paper money can disintegrate so check every day when you are definitely alone.
Leave a credit card at home. Scan both sides of it and leave the information with an emergency contact (e-mailing credit card information, especially to webmail accounts, is not safe).