Luther writes that Christians know two things about themselves: “that a Christian is righteous and beloved by God, and yet that he is a sinner at the same time.” And these two things, which are “diametrically opposed” to each other, produce both humility and confidence. Not one or the other, but both at the same time:
A Christian remains in pure humility. He really and truly feels that there is sin in him and that on this account he is worthy of wrath, the judgment of God, and eternal death. Thus he is humbled in this life.
Yet at the same time he remains in a pure and holy pride, by which he turns to Christ. Through him he strengthens himself against this feeling of divine wrath and judgment; and he believes that he is loved by the Father, not for his own sake but for the sake of Christ, the beloved.
Luther, Martin. Luther’s Works, vol 26: Lectures on Galatians, Chapters 1-4. p235.