On one side, if you trust someone and are wrong, bad things can happen. I am sure you have lived through bad situations because you trusted someone who was not trustworthy. Most of us have been betrayed by someone we trusted at some point in our lives and probably do not want to repeat it. For me, it has happened in both my professional and personal life.
On another side, however, if we do not trust someone who is trustworthy, we can lose out on many good things. Think of all the good things that have happened in your life because you chose to trust someone and were right. I am sure your life is better for it. I know mine is.
Trusting someone is always a risk. I prefer, generally, to trust first and if the person is not trustworthy, at that point I can choose not to trust any more. If I choose immediately not to trust someone, I will never know what good things could have happened.
Having said that, I am also not going to be stupid. For example, I am not going to get into a stranger’s car no matter how much candy he offers.
There really is no good formula for deciding when to trust and when not to trust. Perhaps the best approach is to evaluate the level of risk in each situation and decide from there.