Real are now all but guaranteed a quarter-final place, even with the return leg in Madrid to come on 18 March, after Karim Benzema and Gareth Bale both scored two goals apiece.
Real’s Ballon d’Or winner Cristiano Ronaldo also scored twice in the rout on his return from a three-match Spanish league suspension.
“I am satisfied about everything, because the team played a perfect game,” said Ancelotti whose side are now unbeaten in their last 27 games dating back to October.
“After the early goal, we started getting a lot of room, that was the reason for our perfect night. It was fantastic, everything went well for us.”
Despite the massive advantage, Ancelotti said the Spanish league leaders will be taking nothing for granted for the return leg.
“There is a return leg to come and football is strange,” he said.
“The advantage is big, but we want to make sure we go through. We need to have respect for Schalke and our fans, so we will be putting out our best possible side for the return leg.”
The crushing victory went some way to correcting Real’s terrible away record in Germany as they made the Royal Blues of Schalke look anything but regal.
This was only Real’s second win in 26 visits to Germany after 18 defeats, including their 4-1 drubbing at Borussia Dortmund in last season’s Champions League’s semi-final.
“We didn’t think about the curse in Germany, but in doing as much as we could to win the game and take control of the tie as quickly as possible,” added Ancelotti.