"We have to pick ourselves up now, we were back in on Monday morning, and we can't feel sorry for ourselves," he insists.
"We will make sure that we are back on it for Wednesday now - bouncing back from defeats is the test of a real team's character.
"We have to make sure that we get back together for another difficult game on Wednesday, show the same commitment and spirit - that is not lacking at the club.
"I think you can see the fight and determination to win, it is just the final pass that we are missing at the moment and we must concentrate to get that right.
"We want to stay in touch and there is a lot of football still to play but you want to make sure that when the run-in comes you are up and around it."
Malky knows that there will once again be fantastic support at Derby, and adds:
"The fans are fantastic; since I have been at the club I have seen the outstanding noise they make at home and away.
"I hope they know they are going to get us fighting to get three points wherever we go - they will always get commitment from us - and I think they appreciate that."
Malky says there was no excuse for the defeat on Sunday, even if it was Forest's 'day' following Brian Clough's death last week.
At one point, even the Hammers fans joined their Forest counterparts in getting to their feet when the chant 'Stand up for Brian Clough' went round the ground, and Malky says:
"It was great to nearly have a full house when you play football; it is a great ground that had a good atmosphere.
"The fact that it was Brian Clough's memorial did not affect us one bit; we had the minute's silence but once you get into the game it doesn't affect you, to be honest."
Looking at the game overall, he says:
"It was goals in the last 10 minutes but we had been fairly comfy up to then.
"We had a fair amount of possession in the second half and if they were going to score you felt it would only be a long shot, and it was two great strikes for them - we have to be disappointed.
"We had kept a decent shape and they hadn't really peppered Steve's goal with much - it had all been long range."