Adelaide, Australia: Pacemen Mitchell Starc and Josh Hazlewood spearheaded Australia to a crushing 120-run win in Adelaide on Wednesday leaving Ashes holders England trailing 2-0 and on the verge of losing the five-Test series.
Hazlewood snuffed out England's hopes of a miracle victory when he claimed the key wicket of captain Joe Root in the third over of the final day of the first-ever day-night Ashes Test.
Left-armer Starc ripped through the tail to finish with five for 88 and bowled Jonny Bairstow to clinch victory 15 minutes from the end of the first session.
England now face the prospect of losing the series in next week's third Test at Perth's WACA Ground where they have not beaten Australia since 1978.
"It's always tough coming back from 2-0 down, particularly when you're away from home," Smith said.
"You're only one or two bad sessions away from the series, really.
"We have to be confident, doing the basics well and just backing up day-in and day-out."
While Root was batting England still had a chance to pull off a record run chase of 345 at Adelaide Oval.
But Hazlewood enticed a bottom edge and wicketkeeper Tim Paine did the rest to the unrestrained glee of the Australian team.
Root left the field on his overnight score of 67 and with him England's hopes disappeared.
"Disappointing. I don't think we did ourselves justice," Root said.
"The way we showed character in the second innings proved to everyone we are still massively in the series.
"We've shown throughout the two games in periods we can outperform Australia, just not over the five days.
"If we can perform to our ability for longer periods of time we'll win games."
Australia got off to a dream start when nightwatchman Chris Woakes was out to the second ball of the day, caught behind off Hazlewood for five.
Woakes sought a review and while the 'Hot Spot' infrared imaging system could not find anything, the 'Snicko' sound-video technology detected an edge and the umpire's decision was upheld and Root followed shortly afterwards.
Nathan Lyon got the wicket of fellow off-spinner Moeen Ali for the fourth time in the series, leg before wicket as he attempted to sweep when on two.
England had lost three wickets in the opening 45 minutes of play and were lurching towards defeat.
Craig Overton stayed around for almost 40 minutes before he fell lbw to a Starc inswinger for seven with the first delivery of the second new ball.
Starc had Stuart Broad caught behind for eight and finished off the Test bowling Jonny Bairstow for 36.
England entered the final day 178 runs from victory with six wickets in hand after a dramatic momentum switch on Tuesday.
Australia dismissed England for 227 on Monday but contentiously decided against sending them back in to bat despite holding a 215-run first innings lead heading into the bowler-friendly twilight period under lights.
The tourists subsequently skittled out the Australians for 138, leaving them with a chance of chasing down a record 354-run victory target in the final five sessions of play.
"A lot of people have been asking me that question (about not enforcing the follow-on)," Smith said.
"I haven't thought too much about it but we've won the game. I would have thought about it had we lost.
"Fortunately we were able to hang in there and get the result we were after. Doesn't make any difference any more."
The highest winning fourth innings at the Adelaide Oval remains 315 for six by Australia against England in 1902.