This is important!!

It turns out that there is a hidden parameter called Action Points. Every time you accomplish something, you gain Action Points.

This information is found on guide page 40. The scan posted by GM is there to show the Potential Rank formula, but immediately below that formula is the information on Action Points.

The most important piece of this - Resetting the game is a 50 point PENALTY.

Ouch. So much for guilt-free resetting.

What do action points do, exactly?

The page has a chart of how action affect the Action Points. The only penalty is resetting.

The paragraph describing the Action points says basically this -

"There is a hidden parameter, Action points, which is modified every time you take an action. If your action points are high, your Potential will go up after combination."

Small gain actions -
Successful training
winning a battle

Moderate gain actions -
Finishing a tournament
winning a tournament
winning a local battle (Rank B or higher)
winning a wi-fi battle

Large gain actions -
Excellent training
Coming back from an expedition
Unlocking a monster/breed
Getting a monster bounty (noramon)
Learning a new technique

Large Penalty -
Resetting the game

By the way, the Potential Rank formula uses the Action point total. I will post the Potential Rank formula very shortly.

Local and Wi-Fi battles, eh? That softens the blow considerably. If that really is the case, you could take a monster you've reset with several times and battle with friends repeatedly to compensate.

True, but from what I gather here, Resetting once would be equal to about 7-8 wi-fi battles

Yes. That would be a drag.

The only one that has an absolute value assigned to it is the Reset. The note next to the picture says 50 Points lost. The chart values are all non-specific.

So, what exactly do these action points do again?...

I've been resetting like crazy. >_<

Basically, action points are hidden parameters that dictate how high a potential rank you'll get when combining it with another monster. The higher the potential rank, the higher the statgains.

Resetting frequently will basically mean that combining with that monster will result in a lesser monster than you should have received.

On the bright side, if you end up creating a combined monster with an extremely high potential rating with high starting stats, you can reset to your heart's content while attempting to max it out.