DCM signals can significantly influence the modulation effect. In order to select suitable DCM signals to improve the transient stability of power system, a new method based on total least squares-estimation of signal parameters via rotational invariance techniques and comprehensive affecting index is proposed to select the best DCM signal. Firstly, power fluctuation amplitudes of preselected monitoring points are identified by TLS-ESPRIT. Then comprehensive affecting index and DCM signal strategy table are put forward, taking into account the influence of DC lines as well as interconnected AC lines. Adopting PSD-BPA, simulation is conducted in real power grid models, which shows the selected DCM signal is better than other preselected signals and this method has good feasibility. Meanwhile, the robustness of the proposed method is verified by changing system structures.