To enable fault detection speed to meet the requirement of short-circuit current limitation control, an improved approach introducing multiple parameters is proposed for the basic methodology of a fast fault detection algorithm based on instantaneous current and its variation ratio. By means of numerical simulation, the influence of fault phase angle, large load input, harmonic current and inrush current is analyzed, and the selection of an adjustment coefficient of the proposed algorithm is also obtained. An example is analyzed in the application of current limiting control in an enterprise, and the range of adjustment coefficients of the improved method and the magnitude of its performance improvement are given. The result proves its feasibility and effectiveness. It is concluded that the fault current can be identified within the desired time without mistakes due to fault phase angle, large load input and harmonic current. This work is supported by National Natural Science Foundation of China “Key Technologies for Urban Intelligent Distribution Network Protection and Self-cure Control” (No. U1766208).