Usually I follow a system of always trusting everyone completely, until they let me down, and then I do not trust them again. Since I figure that I am strong enough to take one hit, and that until then, I can give the benefit of the doubt. And the vast majority of people prove quite good. Obviously though, there are occasions, such as when buying and selling when it is the accepted normal to not trust, and there is then no shame to you, or insult to them, in playing safe by following the formal rules, which I always do.

However, I never trust anyone in the public arena, since I automatically assume that without a personal relationship, there is no basis for trust. And I never forget that most people are dishonest with themselves all the time, dishonesty (cognitive dissonance) being the human default, and the main key to the human condition. ( Birds fly, rabbits tunnel, lions are strong, fish swim, hounds run fast, but lying is the special human skill and adaption which sets us apart from all the other animals. ) So that if you can be dishonest even with yourself, then it is unlikely that you will alter your behavior for others.