Considering the unstable inversion of ill‐conditioned intermediate matrix required in each integral arc in the short‐arc approach presented in Chen et al. (2015, https://doi.org/10.1002/2014JB011470), an optimized short‐arc method via stabilizing the inversion is proposed. To account for frequency‐dependent noise in observations, a noise whitening technique is implemented in the optimized short‐arc approach. Our study shows that the optimized short‐arc method is able to stabilize the inversion and eventually prolong the arc length to 6 hr. In addition, the noise whitening method is able to mitigate the impacts of low‐frequency noise in observations. Using the optimized short‐arc approach, a refined time series of Gravity Recovery and Climate Experiment (GRACE) monthly models called Tongji‐Grace2018 has been developed. The analyses allow us to derive the following conclusions: (a) During the analyses over the river basins (i.e., Amazon, Mississippi, Irrawaddy, and Taz) and Greenland, the correlation coefficients of mass changes between Tongji‐Grace2018 and others (i.e., CSR RL06, GFZ RL06, and JPL RL06 Mascon) are all over 92% and the corresponding amplitudes are comparable; (b) the signals of Tongji‐Grace2018 agree well with those of CSR RL06, GFZ RL06, ITSG‐Grace2018, and JPL RL06 Mascon, while Tongji‐Grace2018 and ITSG‐Grace2018 are less noisy than CSR RL06 and GFZ RL06; (c) clearer global mass change trend and less striping noise over oceans can be observed in Tongji‐Grace2018 even only using decorrelation filtering; and (d) for the tests over Sahara, over 36% and 19% of noise reductions are achieved by Tongji‐Grace2018 relative to CSR RL06 in the cases of using decorrelation filtering and combined filtering, respectively.