I had to cheat with some lights a few times (I don't regret it!) ... but that's quite a statement for me. No other movie, game, book, or real life experience has scared me as much as this game.
Which is why I loved the game to bits.
If you're looking for some practical tips, I can offer a few.
You can, of course, just refuse to suspend your disbelief -- as another poster mentioned -- which would kill your fear altogether, but then what's the point?
So let's assume you set your "reasoning" mind aside while playing and get immersed.
There are generally three classic ways to trigger events: picking up stuff, switching stuff or stepping on stuff. Before grabbing a plot item or flipping a switch, check out the area (grab goodies) and make a mental map of whats-what. Floor triggers are not as easily avoidable.
Always know the place you'll hide if you need to run and make sure you have multiple spots -- pick the spot that is closest and remind yourself in your head which spot you'll go to as your position changes.
I also liked to "create" hiding places in each new area I went with boxes, crates and barrels. The game will reset these if you zone out, but setting up little "hidey holes" are useful for both hiding and morale boosting.
Conserve your oil and tenderboxes. Use them when you get really scared -- not all the time. Its a huge morale boost when you have a stockpile of this stuff. You can also use tenderboxes to "mark" strategic spots -- like the end of a hall, or a turn in a corridor.
Recognize monster screams and the "something lurking" music. Run when you hear it. Turn your lantern off by reflex if its on. Keep hidden and your lantern off until the music goes away.
Always close doors. It breaks line of sight and slows monsters down.
When you find a closet, make sure you clear it out so you can get inside. You might also try to place an object in front of one of the doors, so its less likely to accidentally swing open. Its easy to make mistakes when you're in panic-mode.
And don't stare at monsters. Seriously. You lose sanity and it makes it a lot easier for them to see you. If you can't find a good place to hide, then its better to find a bit of darkness, duck down and stare at the wall.
If its still too much, you can always "cheat" and pause the game with the escape key for a breather.
Hope that helps.