Simply put, confidence is your body's internal measurement for likelihood of success weighed with the amount of risk you're taking. If there's a high chance of success with low perceived risk, you will feel confident. If there's a low chance of success with high perceived risk, you will feel unconfident. This is true for anything you do. Not just talking to pretty women.
So for example, if you've never played basketball in your life, your confidence in your ability to make a shot will be very low. But if you're just shooting by yourself, you won't feel "unconfident". Because even though you have a low probability of success, there's also no risk involved. Whereas if we put you in an competitive game (a situation where there is risk of losing), you will feel unconfident. Conversely, if you're actually a good basketball player in that same game and you know you're better than the other team, you will feel very high confidence.
In dating and socializing, its the same. If your body unconsciously believes you have a high probability of success, you will feel this magical thing women call "confidence". Whereas if you've had very little success in the past, you're likely to feel very unconfident and perhaps anxious.
So how do you increase confidence? Demonstrated performance. Basically, you need to gain positive reference points. Because as you gain positive reference points, your body will have good reason to believe that you can complete the task in front of you because you've done it many times in in the past. So your overall confidence will increase.
In the context of socializing and dating, confidence is almost a form of preselection. Because its nearly impossible to have genuine confidence if you haven't actually had some success with women and socializing in the past.
Also, understand that all confidence is contextual. Lets take the examples above: if you're a good basketball player, you may feel very confident on the court, but very unconfident when you're talking to a women. This makes perfect sense. Because playing basketball and socializing are two totally different skill sets. Therefore, the internal measurements for likelihood of success will be different for each.
Listen to this:
http://thematinggrounds.com/the-mating- ... onfidence/
It explains everything I just told you & more in a lot more detail.