It is impossible to dismiss the hypothesis of living in a dream (or a nightmare) dominated by rules that would seem absurd to a further awakening - just as dreams' logic is meaningless in the wake world, and viceversa.
Skepticism is a philosophical current transversal to epochs and thinkers, and it's impossible to provide a synopsis that does not present fatal inaccuracies; it can, however, roughly be divided into two strands (I follow Richard H. Popkin, The history of skepticism).
The first (called Academician) argues that no knowledge is possible, while the second (called Pyrronian) says that there is no adequate evidence to decide whether knowledge is possible, and therefore we should suspend our judgment on all the issues. The first is an incomplete skepticism, because it does not apply to itself: it doubts about everything but not the doubt itself. The latter, however, is also problematic, because it exposes itself to contradicion. Against the skeptical hypothesis, in fact, we can observe that it must also refer to itself: even the doubt itself should be questionable.
If everything is a deception, why shouldn't be a deception the very mental process that leads us to this belief? Just as it's possible that everything is a deception, it's also possible that that "everything is a deception" is a deception. Faced with this limit, the Pyronian tries to escape from language and defines his skepticism as an "attitude", a belief limited in time (now I don't believe anything, in the future we'll see) and a method of research. Sesto Empirico defines his skepticism like as a medicine that, while healing the body, also eliminates itself - a metaphor that recalls the Buddhist parable of the raft to be abandoned once we reach the other side of the river, or the quote by a modern skeptic such as Wittgenstein, who writes:
My propositions serve as elucidations in the following way: anyone who
understands me eventually recognizes them as nonsensical, when he has
used them—as steps—to climb beyond them. (He must, so to speak, throw
away the ladder after he has climbed up it). He must transcend these
propositions, and then he will see the world aright.
Even if we assume skepticism like an attitude, however, the skeptical question is condemned to a deadlock, because a skeptic can't be persuaded that her attitude toward truth is the right one. Although the confidence in our means of knowledge is often overestimated, radical skepticism has deep wounds caused by its tendency to eat himself. If I suspect that we can't know anything true, why this assertion should be the only exception?
Thought cannot decide whether to trust itself or not. So, even if we can't properly refute skepticism, we can't also embrace it.