The best advice is to stay alert, especially in places crowded by tourists. Pickpockets like to blend into a crowd.
Pickpockets usually strike people who appear to be distracted, looking at the sights, dealing with their children, fiddling with their camera, etc. Many of them work in teams, with one team member assigned to distract you in some way while the others move in to pick your pockets.
Carry your wallet in your front pants pocket and, when you get in a crowd in a touristy area, walk with your hands in your pockets.
I was crossing the Ponte Vecchio in Florence a few weeks ago, pressing my way through a solid mass of people, when I noticed that every single man there was walking with his hands in his pockets. When you walk that way, the only way they can rob you is to assault you. That's not likely.
Traveler's Checks are considered passé, and I hear most merchants in Italy won't even accept them. These days people carry a debit card, protected by a PIN, to get cash as needed from the ATMs, then use the cash, or credit cards, for making direct purchases from merchants. I generally use a credit card when I can, and only use cash when I can't put a purchase on the card. That way I don't have to go so often to the ATM for more cash.
Take several cards on your trip (leaving most of them safely back at the hotel) in case you lose one and have to call and cancel it. Be sure to keep each card's contact info, so if you lose your card you can quickly call and cancel the card before they can crack your PIN.
Contrary to the feeling you may get from all this, most people NEVER get their pocket picked and NEVER lose a credit card. This is especially true of people who remain alert, make a few preparations, and are careful.