Protecting DC microgrids (DCMGs) from faults is critical due to the rapid current changes that occur in milliseconds. However, ensuring fast and accurate protection in DCMGs is more challenging than in AC systems. This study proposes a novel protection algorithm using traveling waves (TWs) for fault detection and localization. The high‐order synchrosqueezing transform (FSSTH) is applied to precisely identify TWs at the relay location. FSSTH offers a sharp time–frequency representation, enhancing the accuracy and speed of fault detection. This method can accurately detect transient phenomena like TWs in DCMGs, even with noise and variable fault resistance. By using the spectral envelope with FSSTH, ridges in time–frequency representations are extracted, improving fault diagnosis. The approach differentiates external from internal faults and recognizes fault direction by assessing TW polarity. Testing on two different DCMGs showed this algorithm's high efficiency and accuracy, with fault location errors ranging from 1 to 50 meters in low‐voltage and 13 to 64 meters in medium‐voltage DCMGs, even under challenging conditions like high resistance (up to 500 Ω) and low signal‐to‐noise ratio (5 dB). These results demonstrate the method's superior accuracy and robustness compared to existing techniques.