This paper presents an improved data processing method, which is referred to as the tracking intersection method, for a fibre-based dual-detector differential chromatic confocal probe with a mode-locked femtosecond laser source. In the dual-detector differential confocal system, two fibre detectors of an optical spectrum analyzer are employed to detect the spectra of the confocal signals. One of the fibre detectors, referred to as the measurement detector, is located at the confocal position of the confocal system, and the other fibre detector, referred to as the reference detector, is located at a position with a certain offset from the confocal position. In the tracking intersection method, the Z-directional displacement of a measurement object is derived from tracking the wavelength at the intersection point of the two fibre detector outputs. A new algorithm is proposed to generate a normalized output with a sharp peak at the intersection wavelength, from which the intersection wavelength can be detected with a high-sensitivity while the influence of the non-smooth spectral distribution of the femtosecond laser source can be removed. Compared with the previous tracking local minimum method, the new tracking intersection method is more robust to noises in the fibre detector outputs and consequently can realize better performance such as higher resolution and larger range in measurement of the displacement of the object. The advantages of the new method are demonstrated by simulation and experiment.