Thing with anything realistically, that you're low on confidence about doing, is you often visualise/think about the end goal, shagging a new bird, then you think about the bit before that, talking her into the cab on the way home(or sneaking something into her drink

), then the step before, and it all becomes rather daunting.
What you need to keep thinking, is screw the end results, if the end result is a slap in the face, being laughed at, or banging Jessica Alba the first step is the same, and the sooner you start doing ANYTHING about it, you'll feel better. The more you avoid it, speaking to someone new, the worse you'll feel, the sooner you speak to random woman X at random place Y, you'll instantly start feeling more confident.
Just taking the first step is usually the biggest hurdle, but when you think about how small it is, it becomes easier.
Really the fear is of rejection, which is fair, even the most confident people fear rejection, they just don't let it stop them or hold them back.
Think about the two alternatives, you talk to that hot girl you want to say hello to, she tells you to smeg off, you got no where, you didn't go home with her, now where do you get if you don't even speak to her, same place, you've really got nothing to loose.
When you get it in your head that your starting point, be it not talking to her, or talking and getting rejected, is failure either way, the only possible way is up. Because failing for trying is still better than failure while not trying, so you'll feel better and more confident for next time, and so on and so on.
Life sucks, its very easy to take a confidence blow, I've been down in the dumps for years, the big change, was stopping thinking about the end game for everything, career, woman, hobbies, anything, just do the first thing, you feel so much better.