"In a place where the game seems to flow well" - Someplace with water in it.
"Sometimes your confidence will keep you from exploring more than you need to" - It must be a fork in the road or something where most people take a certain road, knowing that there's nothing in the other fork.
"I encourage you to keep your eye open" - Have Dracula's Eye equipped; it reveals secrets, hidden locations, and clues
"Hold on to your flask" - Have holy water equipped
"While you stand upright" - hold UP on the controller
"and tread forth" - the secret should present itself in front of you.
I'm thinking it's either at the right of the Rover Mansion entrance, or at the waterfall lake. I've not reached the waterfall lake yet, though.