"The second and third goals were poor and you can't give good teams gifts," said the City manager to the media after the game.
"After that we looked sorry for ourselves and there only looked like one winner after we went behind. "We've played well in a lot of games but we lack that mental strength to nail wins to the wall.
"We are missing five or six players all the time and coming to a place like Reading is very hard."
Chris Coleman lost Scott Dann and Aron Gunnarsson to injury during the game and is struggling to field a side to face Nottingham Forest on Saturday.
"Whatever team we put out on Saturday we will be down to the bare bones but it is a big three points against Nottingham Forest, " said Coleman.
"Reading are still a Premier League team in all but name and looking at them shows what we have to do.
"That is the standard we need to get to and we are not there yet - simple as that."