The Gulls beat Solihull Moors for a first win in nine, but Nicholson was unhappy with the attitude afterwards.
"We came in after beating Solihull and too many of the team looked like they'd made it," Nicholson told BBC Devon.
"You should be in on Thursday and you should be head down let's get ready to go and beat Tranmere."
He continued: "Overall it was an OK half and then one terrible bit of defending and a goal and you throw away all the good work that you've done.
"But then that comes from a will to improve, you've got to put the work in every day at training, so that those kind of mistakes stop happening."
Torquay have not beaten Tranmere since 1998, having lost the last three matches the two sides have played since Rovers were relegated to the National League in 2015.
"It's sad that Tranmere versus Torquay should be a clash of two titans in this league and we're coming here as huge underdogs," added Nicholson.
"It shouldn't be that way, our lads have got to set the standards and targets a lot higher than what they have, however they kept going and played some reasonably good football."
Torquay United manager Kevin Nicholson says his side's attitude in training ahead of their loss to Tranmere Rovers contributed to the result.