Paradox works differently from most resources in the game. Chronomancy talents increase Paradox. As Paradox increases beyond 300, spellpower for Chronomancy talents also increases. However, the risk of talent failure also increases, which would cause an anomaly. Paradox below 300 will reduce spellpower.
The only base way to reduce Paradox is to rest or wait, which invokes the Spacetime Tuning spell effect. Moving around, using other talents, and so forth will not reduce Paradox. Only actual resting/waiting (using the 'r' key or similar) will reduce your Paradox. Some other talents can also be used to reduce Paradox. Willpower directly reduces your current paradox (by 2 Paradox per 1 Wil), leading the discussion of modified paradox.
Paradox is displayed in the resource bar as two numbers: Raw paradox and modified paradox. The resource bar displays first modified, then raw. It reads as "modified / raw (percent failure)". Modified paradox is used to determine your failure chance. The modified value comes almost directly from your Willpower bonus, and your Paradox-using sustains. Raw paradox determines your spellpower for Chronomancy spells. Talents that increase paradox increase both raw and modified paradox.
Your desired raw Paradox can be set with thespell. When you regain Paradox by resting, your value will never drop below the desired raw Paradox.
The dual nature of Paradox increasing spellpower and increasing anomalies gives different options for play. One route is to keep Paradox as low as possible through use of Willpower, talents and items. This gives the player the ability to use Chronomancy talents more frequently. The Stasis talent tree is designed around this playstyle.
The alternate method is to push up Paradox for extra spellpower, and to use talents that put anomalies to work for you. This doesn't stop anomalies from happening, but you can control them - to some degree. Skills in the Flux tree are designed around this playstyle. The risk in this playstyle lies in the random nature of the anomalies. You may get a useful , or you may get some random villager NPCs to teleport to your location. Control over these random events can be very useful, or it may do nothing useful for you when you need it.