The Hatters took the lead before City fought back to win 2-1.
Edwards said: "I think we can take confidence. We are playing well performing well. There's more to our game I think we've shown that, difficult opposition as well.
"I thought we were really brave, I thought the performance was excellent, without the ball really aggressive. Tried to not let them get their rhythm, get their game going. The goal was an excellent example of that.
"Frustrating to be honest, especially when you go 1-0 up. Full credit to Manchester City, that's what top teams do."