Pep Guardiola believes Manchester City are improving in the Champions League as they look to secure the trophy for the first time in the club's history.
City have so far failed to replicate Premier League success in Europe, with Liverpool beating them 5-1 on aggregate in the quarter-finals of last season's Champions League.
The Premier League team face Schalke in Germany on Wednesday in the first leg of this campaign's last-16 tie, with Guardiola confident they have learnt from past mistakes in the competition as they chase their dream of European glory.
"I believe after three seasons we do better things than the first season, just for the fact we are together for a lot of games and a lot of training sessions," he said.
"This competition is special and the teams are good. With the atmosphere in the stadiums, you have to control your emotions, suffer the bad moments.
"The right moments make the difference. We're confident. We arrive with many dreams in our heads, to make it a good position for us before we bring it back to the Etihad - we feel strong and feel a lot of confidence there.
"We must play a good game and score goals, it is so important away to score a minimum of one goal.
"You can't go through in these competitions if you're not yourself. Sooner or later you'll be out, here, the quarters.
"If you want to dream of the latter stages you have to be yourself, incredible every minute. It's a challenge."
Liverpool continue to battle City for the Premier League crown and may yet meet Jurgen Klopp's side again in the Champions League this season, with Guardiola refusing to underestimate the threat they pose.
"Against Liverpool last season we went quite well, I don't have many regrets in that competition," he added.
"People say Liverpool are underestimated, but Liverpool is Liverpool. They have five Champions Leagues, incredible trophies.
"For us it is nice to be there with them every single season, to fight and compete like we are competing, especially the last two seasons."
Guardiola also confirmed they will be without John Stones and Gabriel Jesus for the match in Gelsenkirchen, although he stressed they are not serious problems.
"John has a groin problem, Gabriel finished in Newport [where they won 4-1 in the FA Cup on Saturday] with a hamstring problem," the City manager said.
"Not a big one, but both enough problems to not be here."