The invention discloses an anchor cable outer anchor head steel strand protective device. The anchor cable outer anchor head steel strand protective device comprises steel strands, a steel base plate and an anchor. The steel strands include the inner steel strand located in a rock body and the outer anchor head steel strand extending out of the outer side of the anchor. The periphery of the outer anchor head steel strand is sleeved with a cylindrical protective cover, and a flange is arranged at the end of the cylindrical protective cover and connected to the steel base plate through bolts. The top wall of the protective cover is provided with a first exhaust pipe and a first oil inlet. The upper portion of the protective cover is provided with an oil supply tank, an oil outlet is formed in the bottom wall of the oil supply tank, the oil supply tank is fixed to the steel base plate through an oil supply oil tank supporting frame, and the top wall of the oil supply tank is provided with a second exhaust pipe and a second oil inlet. The first oil inlet and the oil outlet are connected through an indicator pipe. The invention further discloses an installation method of the anchor cable outer anchor head steel strand protective device. The anchor cable outer anchor head steel strand protective device is simple, practical, efficient, economical and capable of guaranteeing that the outer anchor head steel strand is immersed in an oil body all the time, and an inspector can visually judge the oil level in the protective cover.