This paper observes the parametric excitation on atom chip by measuring the trap loss when applying a parametric modulation. By modulating the current in chip wires, it modulates not only the trap frequency but also the trap position. It shows that the strongest resonance occurs when the modulation frequency equals to the trap frequency. The resonance amplitude increases exponentially with modulation depth. Because the Z-trap is an anharmonic trap, there exists energy selective excitation which would cause parametric cooling. We confirm this effect by observing the temperature of atom cloud dropping.