is it Biblical?
is it Demon possession?
is it basically a bad idea?
is it Orthogonal to Christianity? (i.e. the question is equivalent to "How do Reformed Theologists think about Scala vs Clojure?")
The answer ranges from a bad idea to truly demonic, depending on what form of altered state of consciousness is implied. This question is interesting and one might not make the connection between hypnosis and faith healing movements but it does have some overlap into certain fringe movements within Christianity, such as the faith healers like Oral Roberts, T.L. Osborn and William Branham. My Uncle actually leads the Branham-ites and the research (even though secular) that I dug up, actually helped me to understand better the occult and quackery side of it.
Dr. James Braid, the Scottish surgeon coined the word "hypnotism," after witnessed demonstrations by a French mesmerist in 1841. Therefore, the modern term is too recent to gather good references from reformed heavy hitters. Yet this need not discourage us, the reformed position can easily be extracted by simply breaking up hypnotism into its historical components and comparing its methods to reformed doctrines.
The history of hypnosis finds its roots in earlier theories developed by Mesmer. He in turn finds his roots in ancient medical philosophy like traditional Chinese medicine and even shamanism. The idea had to do with a belief in animal magnetism and ways of manipulating it to heal people. One had to be brought into a 'state' to experience the 'strange' effects of the magnetism of the planets linked to our bodies, like the ying and yang.
The subject approaches the circumference of reformed theology in terms of Christian 'religious experience'. For example being slain in the Spirit could be basically considered the same state. ( I say may, because I do not discount the possibility of feinting when overcome by a conviction of sin, r wonderful view of God's grace, if a person is feeling a little weak or in a room without a lot of oxygen. )
In some sectors of Christianity there is an overlap between states of consciousness and religious experience, especially among the cults and extreme faith healers that used similar techniques of mesmerists and hypnotizers to bring about a 'frenzied experience' in the hopes of curing psychosomatic illnesses. Worse, when brining in a layer of anti Christian doctrine, in addition to the sleep induced manipulations, or spiritsm, it veers into the occult which aggressively crosses the boundary line of Christian ethics.
To work from a reformed position of the 'ecstatic' or the state of being in a prophetic 'trance' which historical mesmerists would have discounted but explained as religious phenomena that verified their theories, reformed views establish a position that is 'directly opposed' the techniques used in mesmerism that eventually led to hypnosis. We can see this in how John Owen explains the experience of the Holy spirit to be an 'orderly, voluntary creative work' that does not play 'tricks with our minds', or otherwise 'manipulate us' towards a uncontrolled 'ecstasies' or state of consciousness:
This opposes most of the history of hypnotism including mesmerism and most of the popular forms of hypnotism used in entertainment. To elaborate a little, interesting and concise details of the history of Mesmerism and early science of hypnosis can be found here at this thesis paper on Mesmerism. (Secular source: B. Brilliant)
For example regarding rituals common to Mesmerism and early hypnosis:
First hand subjects of Mesmer indicate how powerful unstable people are when getting together with high expectation and who open themselves to an ‘experience’:
This covers the subject from a charlatan and quackery standpoint, and in deed this is the origin of the science, however their also is the demonic element. Extreme religious groups do more or less the same thing as a ‘road show’ entertainment kind of false healing program and when this is accompanied by teachings that run in direct opposition to the gospel, reformed theology can’t be view this as a demonically enhanced version of simple quackery, although both may be primary interested in making money under the abuse of their clients. For example Mesmersim has lead to Swedenborgianism which is a Christian sect that denies almost every traditional Christian belief as well as supports abelief of out of body experiences with spirits, etc. Also in the article I have linked to we see the background of ‘Christian Science’:
The occultist history of the science is also conveniently found in the article:
However, there is an element of hypnotism that would be more medical and a kind of simple self-induced sleep with simple attempts at the ‘power of suggestion’. This does not have the same abusive, or occultist implications. In this sense a man could even whisper to his wife in her sleep, ‘You do not want to buy purses and shoes’ and see if it has any effect without necessarily sinning. The only thing I would say is that considering the dark history of the subject, often overlapping with occult practices and being pioneered by people strongly opposed to reformed views, a reformed position would remain suspicious to say the least. More than that since, the heart of man is perceived as being 'desperately wicked' and 'deceitful above all things' the idea of subjecting your own thoughts, conscious or sleep induced, to another sinner, where principles and guard of aware discipline against all temptation is willingly surrendered, seems to oppose the concepts of sanctification through the study of God's word. In other words, prayer and discipline are reformed methods for quitting smoking and hypnosis is just various shades of gray, or even black, which can't be as effective or as reasonably reliable. However, as Medical hypnosis does not have these darker undertones, so it would be slotted more along the lines of a bad idea, rather than the demonic.