From Wayne Kawamoto,
Your Guide to Magic & Illusion.
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Perhaps the most difficult thing for a new magician to overcome is nervousness when performing in front of a crowd. While there's no magic remedy for nervousness, here are a few things that have personally worked for me.

Tough Art
I maintain that magic is one of the most difficult arts to get into. There’s no way to slowly get one’s feet wet and work oneself up to performing in front of a live crowd. Musicians can play backup-one sings in a choir before performing solo. But in magic, there’s little opportunity to gain experience before being thrust into the limelight with all eyes on you.

Second, magic is one of few arts that potentially draws the worst in spectators. Few spectators watch dancing and want to disrupt the performance or make it difficult for the dancers. At times, when performing magic, you will encounter hostile crowds that question your every move, interrupt your routines and even grab your hands and reach into your pockets. While this has happened to me, it’s a rare event.

Standing Up for Magic
So how does one get up the nerve to stand-up in front of a crowd? The best course is to be prepared (the old Boy Scout motto). Practice until you thoroughly know your routine and are confident with it. After practicing in front of a mirror, ask your magician friends to review your routine from a technical standpoint to ensure that you are not revealing something that you should not.

It’s probably best in the early stages to concentrate on easier tricks that allow you focus on presentation and help you build your confidence. I personally made the mistake of trying to demonstrate difficult tricks when I was beginning in magic, which made my start far more difficult. You have to be secure in the secrets and moves before you’re standing in front of an audience.

After mastering the technical aspects of an effect, you’ll want to make sure that your patter or presentation is flawless. Remove those awkward silences and make sure that you’re talking and interacting with spectators, particularly when performing any dirty work. Here, videotaping will provide you with lots of insights and valuable feedback.

Giving Your Best
Something that has helped me is to approach magic with the goal of entertaining spectators. I’m not trying to fool them but give them a fun experience. And when I enter a show with this attitude, I think that spectators understand that I’m there to offer them some fun and they tend to relax.

Having the spectators on your side effectively removes conflict and encourages them to go along for the ride. Going in with an attitude that you’re going to fool them bad or make them look silly invites scrutiny and negative feedback. While some magicians have smart aleck characters, these are experienced entertainers who almost can’t be caught and know where to draw the line with audiences.

Even when showing magic to friends and family, I recommend that you have three routines that you have polished and can do well. This way, if one trick goes bad--you make a mistake–you have another that you can do.