The location of the grounding grid conductors is critical for performing corrosion diagnosis and maintenance work. An improved magnetic field differential method to locate the unknown grounding grid based on truncation errors and the round-off errors analysis is presented in this paper. It was proven that a different order of the magnetic field derivative can be used to determine the position of the grounding conductor according to the peak value of the derivative. Due to the accumulative error of higher differentiation, the truncation error and rounding error were used to analyze to accumulative error and to determine the optimal step size to measure and calculate the higher differentiation. The possible range and probability distribution of the two kinds of errors at each order are described, and the index of peak position error was derived, which can be used to locate the grounding conductor in the power substation.