Locating the saddle slot on steel-string acoustic guitars
The distance from the nut to the saddle is approximately twice the distance from the nut to the 12th fret. Installing the saddle at precisely that point is incorrect, though, and will give you poor intonation. You must add a little more string length for the guitar to play in tune. This added string length is called compensation.
For compensation, a guitar's bass strings need more length than the treble strings. This difference between bass and treble compensation is why steel-string guitar saddles are installed at an angle.
The two pointers on the Saddlematic record the bass/treble compensation, and mark the proper location and angle of the saddle slot. To set the correct intonation, you must be very accurate in adjusting and locking the position of these pointers.
For a 3/32"-thick saddle, the pointer for the treble strings should be set to measure exactly 1/16" (.062") from the body of the tool. The bass pointer should be set for 5/32" (.156"). With these settings, the pointers will indicate the location and angle for the front edge of the saddle slot, not the center of the slot. Marking the front edge means that you won't be removing the reference line when routing the slot.
Be precise: after tightening the set screws holding the pointers, double-check your measurements.
These measurements provide compensation appropriate for both short-scale and long-scale steel-string guitars (24-3/4" to 25-1/2" scale lengths). In theory, there's a difference between settings for short and long scales, but the difference is so tiny that it's impractical to adjust to such tolerances (the short-scale settings would be .060" for treble and .150" for the bass side).
If your saddle width is not 3/32", adjust the pins to take this into account. Example: A 1/8" saddle is 2/64" wider, so set the pins to place the front of the saddle 1/64" closer to the nut. (The back will be 1/64" closer to the bridge pins.) This keeps the center of the saddle in the same position for good intonation.
Tip: Place masking tape along the front edge line, and then locate a second piece of tape at the back edge of the slot to be routed. It's easy to follow your routing progress with the tape marking the front and back edges of the saddle slot.