McDermott's men, who were unbeaten at the Madejski Stadium in six matches prior to last weekend's defeat, hadn't conceded a single home goal since November until Darius Charles found the back of the net for the League One side.
"We need to put last week to bed," McDermott told the club's official website. "We had a bad day, now we need to respond. You get praise when you win and stick when you lose, and we probably deserved it because we didn't turn up on the day.
"Now we go to Watford, it's a great game to play, it's local to us and live in front of the TV cameras.
"Nobody can take away what the players have done this season. The squad we've got, how well they're doing, up against big teams, big squads and big money."
Fifth-place Reading hold a nine-point advantage over Watford in the Championship at present.