Town boss Billy Heath accepted his side deserved to be dumped out of the FA Trophy after they were beaten 3-2 at The Shay by Matlock.
The two clubs drew 1-1 at Matlock on Saturday, but the Derbyshire side got the better of The Shaymen thanks to two goals from Marcus Dinanga and a winner from Ted Cribley, which came after Jake Hibbs and Matty Kosylo had brought Halifax level.
Heath said: “We were poor again for the majority of the game.
“We only really played for about a 15 minute spell in the second-half.
“Scored two goals and just when it looked like we were creeping on top we gave an horrendous goal away - that’s the theme at the minute.
“We shot ourselves in the foot - a 70 yard ball cross-field, once again we defend so poorly and it’s in the back of the net.
“But Matlock deserved to win. Over the two games the best team won.”
Heath says his team were second best for the majority of the two matches against Matlock.
“It’s down to the mentality,” he said. “The quality hasn’t suddenly disappeared.
“We couldn’t mask it against Matlock - they deserved to go through over the two games.
“I said in the changing room ‘be honest’. We want honest players who will stand up in the these situations.
“We have no qualms about not going through because in 180 minutes of football we played for about half an hour.”
Heath says his team is suffering from a lack of confidence after now registering three consecutive defeats.
He said: “If confidence is low they’ve got to work hard and get out of that.
“When they go on the pitch they’ve got to play through it.
“It’s ridiculous that it’s two weeks today that we beat Dagenham convincingly.
“But this is football. It’s about mindset, and players have to be brave now and start playing again.
“Yes we’ve tinkered with personnel a bit because we needed to get players to have a game and we wanted to have a look at one or two.
“But we look so short of confidence.”