Electron Cyclotron Harmonic (ECH) waves driven by a loss cone distribution are studied in this work by self‐consistent particle‐in‐cell simulations. These waves have been suggested to play an important role in diffuse auroral precipitation in the outer magnetosphere. However, particle simulation of this instability is difficult because the saturation amplitude of the wave driven by a realistic size loss cone distribution is very small. In this work we use an extraordinarily large number of particles to reduce simulation noise so that the growth and saturation of ECH waves can be investigated. Our simulation results are consistent with linear theory in terms of growth rate, and with observation in terms of wave amplitude. We demonstrate that the heating of cold electrons is negligible and non‐resonant, different from previous conclusions, and suggest that the saturation of the wave is caused by the filling of the loss cone of hot electrons.