Nuno's side earned a long-awaited first Premier League win of the season and left the Hornets still searching for theirs.
Matt Doherty's strike and a Daryl Janmaat own goal ensured it was Wanderers who broke their duck with a 2-0 success and climbed out of the bottom three, while Watford remain at the foot of the Premier League table.
"We win, we draw, we lose. We are ready to compete," said Wolves boss Nuno. "Today we won the game, and I thought we were the better team. Our fans saw a good game and we now have to raise our standards and improve.
"We had to improve. We haven't had good performances. We needed to raise the standards. We improved last season, last week and we improved today. We have to improve during the competition.
"What is very hard is to play games and improve – compete, compete, compete – and the boys did very well today.
"It was a good performance. We were very organised and defensively we were very good. We were aggressive, we recovered the ball and our shape was good.
"The clean sheet is the final result of something. Sometimes you are not well organised and you get a clean sheet but today I think we were."
Watford are without a win in 11 Premier League matches going back to last season, although Sanchez Flores has overseen just three of those since returning to the club to replace Javi Gracia as manager.
The Spaniard, who saw his side thrashed 8-0 at Manchester City last weekend, said: "We need to work hard and improve and over the weeks change the mentality of the players and the way we play.
"We need to work harder and make the opponent work harder to beat us. They were easy goals, the first one was very easy. We need to work hard to try to avoid these kind of situations.
"Once we conceded the first goal it is difficult because of the morale of the players. We need to be stronger in defence and more compact and hopefully we will work and be better in the future.
"In the last three matches leading the team I am conscious of the situation. To find our style is one of the most important things."