This paper presents a new approach to design tool holder subjected to dynamic loads. The   aim of this paper is to estimate damping based on experimental and simulated data with high degrees of freedom. Accurate damping ratios were extracted   using modal damping based on fitting exponential decays plus subspace model. The data is collected through three fixed accelerometers and one moving, and simulated data using ANSYS. To validate the proposed model impulse excitation  plus random excitation were used to fulfill  the criteria of output only measurement .The damping matrix  was calculated using measured damping ratios to simplify the  damping estimation and save time. The main advantage is the degree of accuracy used with respect to the complex mode. This   method can be used in higher order frequency and complex structure.