The Saddlers looked to be in a position of a control when Andy Cook’s goal gave them a half-time lead in Greater Manchester.
But Walsall collapsed completely after the interval with Bolton scoring three goals in five minutes.
And Keates admitted he is prepared to dip into the transfer market to sort out his leaky defence.
“That is a possibility and something we are looking at to take the club forward,” Keates said when asked if he is looking to sign defenders this month.
“But we have got a full week on the training ground now. There will be bits that have to be worked on this week. We have to make better decisions.
“At half-time I didn’t see that performance coming. We had spoken about starting bright.
“But they have a corner, we don’t get into out slots quick enough and it just becomes too easy.”
Keates said his players became “shell-shocked” after Clayton Donaldson pulled Bolton level.
“We got shell-shocked again,” he continued.
“It’s something that needs to be addressed. We spoke about it through the week.
“We were outstanding in the first-half. But we need to re-group into our shape a lot quicker. We didn’t.
“Looking back at the goals there are one or two players who need to do more.”
Keates believes a lack of concentration led to a number of Bolton’s goal.
“I am speaking about the same things every week,” he continued.
“You are vulnerable after you concede. But you have to find your way back into the game.
“We can’t make decisions like we are at the moment. We have to be compact and we have to be organised. We can’t have players just switching off.”
A total of 1,498 Saddlers fans made the trip to watch the third round clash.
And Keates says the team is going to need that support for the rest of the season.
“They were outstanding - the fans were absolutely outstanding,” the boss added.
“The fans were right behind the players and that is what we are going to need now for the rest of the season.
“We always travel well and we need that at home now. We are going into a period of games where we are playing teams who are below us at the moment.
“And we are in a situation where we need to find a win from somewhere. We need that vocal support and encouragement behind us.”