The more you learn from it, the better you will do and the more profit you will get, so do not consider losing as a bad thing. End up doing whatever you can as best as you can and you should be fine. Trusting yourself doesn't mean that you trust yourself to win, it means even if you lose, you will get something out of that competition, learn from your mistakes, get better for the next time.
You are right, and when it comes to trading, when you win, you gain profits. When you lose, you gain experience and knowledge because every wrong decision makes you learn one wrong way of doing that, so losing might be bad for your finances. Still, it is suitable for your knowledge and experience.
Joining trading competitions can actually help one learn some new strategies and gain some experiences, but it is not just the right way to learn more about trading. Anyone wishing to join a trading competition must have equipped themselves with with the basic knowledge about trading because inexperienced and unskilled traders stand the chance of making mistakes that will make them lose money and lose the competition too.
For newbies, it is important that they prepare very well before joining a competition. Poor preparation might lead to frustration and impulsive decisions, making them learn more after some silly mistakes.