The 36-year-old Swiss put on a masterclass to beat Nadal 6-4, 6-3 on Sunday, lifting his sixth trophy this season and underlining a turnaround in fortunes against his long-time nemesis.
Federer, the world number two, ended a sequence of five straight defeats to Nadal at Basel last year, before winning their gripping Australian Open final in January.
Federer also beat Nadal at Indian Wells and in the Miami final prior to Shanghai, although the Spaniard still holds a handsome advantage in their overall record down the years, winning 23 of their 38 matches.
Federer said that "we don't have enough years left on the tour" for him to overhaul his great rival in their head-to-head count, but he insisted he's not concerned by the disparity.
"I just think I'm not so scarred like maybe I have been in the past, not that I was horribly scarred in any way," said the Swiss, when asked what had clicked against Nadal.
"But I did lose against him sometimes, a lot of the times especially on the clay courts."
Federer holds a record 19 Grand Slam titles, three ahead of Nadal after both players cast off injuries to add two more major victories this year in a surprise resurgence.
Federer skipped the clay court season this year and he said avoiding Nadal on his favourite surface had also given him an advantage.
'He saved his body'
He said he believes he lost the epic 2008 Wimbledon final against Nadal because he was still rattled by a heavy defeat just a few weeks earlier at Roland Garros.
After his five-set victory over Nadal in Melbourne this year, Federer spoke of how he had focused on playing "the ball, not the opponent" to avoid any mental demons.
The Swiss legend also said on Sunday that he is highly unlikely to knock Nadal off the number one spot in the world rankings in time for the end of the year.
But with his advancing years he is more sanguine about his ranking, and said he was just enjoying staying injury-free and in good form.
"It's definitely been the best I felt since Wimbledon," he said, where he won the championship for a historic eighth time in July.
The Swiss great, who has been carefully managing his schedule, will now return home to map out the next few months to ensure he continues his fine run.
The 31-year-old Nadal, who was on a 16-match streak before Sunday's final, said Federer was reaping the benefits of taking breaks from the sport.
The two old stagers are the last members of the 'Big Four' still standing this season after Andy Murray and Novak Djokovic were both sidelined by injury.
"For this year, Roger did great in all the events that he played, so looks like he saved his body," said Nadal.
"He played very high level of tennis during the whole season, so well done for him and happy to see him play well."