The dough should be soft and slightly sticky, not too dry. You may need to adjust the amount of water or flour you use depending on where you live (altitude, weather, etc).
Knead for 5 minutes.
Let the dough rise until doubled.
Preheat the oven to 450ºF.
Turn the dough out onto a lightly floured surface. Roll it out slightly until it's about 2 inches thick and slice it into about 12 strips.
Twist each rope into a pretzel shape. Place on a lined baking sheet.
Let rise for 20 minutes.
Combine egg and water. Brush with egg wash and sprinkle with coarse salt.
Bake for about 15-18 minutes, or until dark golden brown on top.
Brush with melted butter after baking.
I use instant yeast but if you have active dry that will also work just fine. If you prefer to bloom your yeast in water, just add it to the water and then follow the recipe as written, leaving it out in step 1.