Gracia acknowledged that his side struggled to recover from that early setback, but is keen to quickly look forward to upcoming games against Bournemouth and Burnley instead of dwelling on the defeat.
"Playing against Liverpool is always difficult. They are very good and if you concede an early goal, it's very difficult. We tried, but they were much better," Gracia told BT Sport.
"We know we need to improve our performances away from home but we are focusing on the next two home games. We would like to be better then with the support of our fans.
"We know we need to improve, but you need time to build up a better team. We have time over the next two weeks to improve. We need to get points as soon as possible. We will work hard."
The defeat leaves Watford 11th in the Premier League table, eight points clear of the relegation zone.