Option #1: Oblivion in laudanum.
The solution is extremely Victorian: F.F. Gebrandt's Superior Laudanum, to help you sleep at night.
You can find it in the Echo Bazaar (click the "Bazaar" tab), in the shop Nikolas Pawnbrokers .
Each bottle costs one Echo, which can be quite pricey if you're trying to sell Whispered Secrets or the like in the Bazaar.
Drinking laudanum is bad for your health, and your Wounds quality will increase a bit one change point), but you can reduce that with F.F. Gebrandt's Tincture of Vigour.
I imagine that Gebrandt is an extremely wealthy lady.
Alternatively, you can just rest at your Lodgings if your Wounds quality is 3 or higher.
Once you become a Person of Some Importance (PoSI), as with the Tincture of Vigour and Ablution Solution, this option will become less viable; unlike the other two, it will also have a nasty side-affect: every time you drink a bottle of the stuff, you'll become slightly more addicted to it, resulting in the Laudanum becoming less effective. Option #2: We're all mad here.
Go to A state of some confusion.
It will discard and replace all of your Opportunities with new cards, so don't do it if you really like your current Opportunities.
Almost all of the Opportunities and actions available in confusion will decrease your Nightmares (though some will abuse your base stats a bit, and one or two will increase your Nightmares while giving you something else you want), and you will leave A state of some confusion once your Nightmares drops to zero.
There are two ways to get to A state of some confusion: Go to Mrs. Plenty's Carnival , into the House of Mirrors , and then Gaze Into Dream's Mirror, which requires that you have at least one in Nightmares.
Let your Nightmares quality increase to 8.
You'll be taken there immediately.
A state of some confusion doesn't cost you any Echoes, but has a much worse action-efficiency compared to drinking laudanum.
(Laudanum seems to do about 4 change points of Nightmares reduction, and actions in a state of some confusion are more like 1-2 change points of Nightmares reduction.)
Not all actions there will decrease your Nightmares, but drinking laudanum will waste some of your time with curing your Wounds, so it's a wash; there's some good reasons to just let yourself go mad.
Unfortunately, a few of the actions in confusion have a chance to abuse your four main qualities, and there are a few other small-ish drawbacks , so it's not all upside.
Option
#2 if you have Memories of Light:
we're all mad here, too.
If you have 10 Memories of Light , then you can spent two of them to go to the Mirror-Marches instead of A state of some confusion at the carnival.
If you have at least one Memory of Light , then getting to 8 in Nightmares will take you here instead.
The Mirror-Marches are much more generous than A state of some confusion ; your main qualities won't be abused nearly as much, and actions that remove two or more points of Nightmares are much more common. Option #3: Psychotherapy.
In your Lodgings, you'll get an option to Find a way to deal with your Nightmares if your Nightmares quality is 4 or higher.
Spend a Sudden Insight (possibly gained via
Invite a friend to join you in something terribly intellectual from your Lodgings), and you'll lose 5 change points of Nightmares .
Your friend will gain one change point of Nightmares and also spend one action, so you should return the favor sooner or later.
gaming.stackexchange.com/users/9522/PotatoEngineer
In addition to Paul Marshall's excellent advice: The Mirror Marches are infinitely better than the State of Some Confusion.
The State of Some Confusion almost always damages your stats when you make use of its opportunities, or else applies another Menace, and when you escape from it you lose change points in all of your dreams
(this is a bad thing).
The Mirror Marches, for the most part, raises your stats, and the only dream you lose change-points in is Is Someone There?.
gaming.stackexchange.com/users/61706/Snowskeeper
I'd just like to add that if you go to the State of Some Confusion , you lose a lot of dreams and four Memories of Light anyways, so it's better to just stay in the Mirror-Marshes and lose one upon leaving.
I learned this the hard way when I went to the State of Some Confusion from the Mirror-Marches so that I could save a Memory of Light.
gaming.stackexchange.com/users/70030/Alex
One option is to consult a friend:
This allows you to spend a sudden insight and invite a friend over to confess all of your fears too (though they suffer a small increase nightmares themselves).
Of course, this option is only available if your nightmares have reached level 4, and is only viable if you have a willing party in your group of friends.
As an aside, the reason I had not seen this option previously is that while my nightmares had reached level 4, I had suppressed them somewhat using my cheerful pet goldfish.
When "equipped" as a pet, a cheerful goldfish grants a -1 nightmares modifier.
gaming.stackexchange.com/users/12937/RedRiderX
Action ineffecient and chancy but drink the warm drink in refreshment tent at the carnival, when your scandal gets too high go to your lodge and attend church.
May take several tries with the warm drink as it is chancy.
gaming.stackexchange.com/users/87611/Guest
In The Shuttered Palace, the commission to paint a portrait of the royal children has two options: Arrange a sitting, and Consult your Bohemian Friends.
The Bohemians cost prisoner's honey, is a bit more difficult than the sitting, but reduces your Nightmares by one change point on success.
If your Persuasive is high enough, that's a viable option, costing less than Laudanum and (depending on persuasive) less risky than carnival wine.
gaming.stackexchange.com/users/173263/Derek
Sometimes completing story lines will reset your nightmares, so it might be worthwhile to continue as normal until your nightmares get to 7 when you are in danger of going insane.
gaming.stackexchange.com/users/253683/Guest
Go to the Carnival and drink the spiced wine.
^_^It has a good chance of reducing nightmares.
That’s what my Fallen London OC does.
gaming.stackexchange.com/users/244769/Michelle
In spite of  the good advice I was given previously , I've followed a few too many Opportunities that have resulted in rather... troublesome, memories, and now my nightmares are approaching level 5.  Every once in a while, I encounter an Opportunity or Storylet that reduces my nightmares somewhat, but due to my line of work, my nightmares always seem to be dangerously high.  I've seen too much of what cannot be unseen,  how might I reduce my Nightmares?
How can I make the Nightmares stop?
gaming.stackexchange.com
<fallen-london>
gaming.stackexchange.com/questions/130974
gaming.stackexchange.com/users/12937/RedRiderX
Sometimes completing your storylines will reset your nightmares. You can also try drinking Laudanum or resting at your lodgings. There are plenty ways to deal with Nightmares, such as drinking the spiced wine.
The community suggesting some tactics.