Confidence is a state of being clear-headed: either that a hypothesis or prediction is correct, or that a chosen course of action is the best or most effective. Confidence comes from a Latin word 'fidere' which means "to trust"; therefore, having self-confidence is having trust in one's self. Arrogance or hubris, in comparison, is the state of having unmerited confidence—believing something or someone is correct or capable, when evidence or reasons for this belief are lacking. Overconfidence or presumptuousness is excessive belief in someone (or something) succeeding, without any regard for failure. Confidence can be a self-fulfilling prophecy, as those without it may fail or not try because they lack it, and those with it may succeed because they have it rather than because of an innate ability.

The concept of self-confidence is commonly defined as self-assurance in one's personal judgment, ability, power, etc. One's self-confidence often increases as a result of experiences of having satisfactorily completed particular activities. Self-confidence involves a positive belief that one can generally accomplish what one wishes to do in the future. Self-confidence is not the same as self-esteem, which is an evaluation of one's own worth. Self-confidence is more specifically trust in one's ability to achieve some goal, which one meta-analysis suggested is similar to generalization of self-efficacy. Abraham Maslow and many others have emphasized the need to distinguish between self-confidence as a generalized personality characteristic and self-confidence with respect to a specific task, ability, or challenge (i.e. self-efficacy). The term "self-confidence" typically refers to a general personality trait. In contrast, "self-efficacy" is defined by psychologist Albert Bandura as a "belief in one's ability to succeed in specific situations or accomplish a task" and refers to self-confidence that is expressed toward specific situations and objectives. Building off Bandura's concept of self-efficacy, Alex Stajkovic also introduces the concept of "core confidence," which "psychologically enables, or unlocks, one’s existing potential by believing that one can handle what needs to be done." When applied to the workplace, employees who have high core confidence are more likely to accept and commit to goals, while also increasing their performance. Psychologists have long noted that a person can possess self-confidence in their ability to complete a specific task (self-efficacy) (e.g. cook a good meal or write a good novel) even though they may lack general self-confidence, or conversely be self-confident though they lack the self-efficacy to achieve a particular task (e.g. write a novel). These two types of self-confidence are, however, correlated with each other, and for this reason can be easily conflated.