Hi Peter, thanks again for that important question.

No, it does not mean that a Christian cannot sin, nor does it mean that we do not sin. Just go back to chapter 2:1: "My children, these things I write to you in order that ye may not sin; and if any one sin, we have a patron [or: advocat] with the Father, Jesus Christ [the] righteous;" A child of God is born again and thus received a new nature, one that cannot sin. But we also have the old nature in us, often called the sin in us or the flesh. Nowhere in scripture do we learn that we lose the old nature when we are born again. We have both in us, until we leave this earth (Phil 3:21; 1 John 3:2). 

You might wonder now whether we then have a contradiction in these verses. Whereas 1 John 2:1 implies that we can sin, 1 John 5:18 seems to state that we cannot. Well, we need to understand how John writes, how he looks at certain matters. The key is that John writes oftentimes a) in an absolute, abstract manner, meaning either something is the case or not. There is no middle ground. And b) he describes something as what it typically is. Let me make an example: Water is typically transparent. But now you might find some murky water. Is it therefore no water? Of course it is, even if it doesn't show the typical characteristics of water. To put it in John’s language, he would write: "Water is transparent!" He would do so because that is typical/normal for water. But he wouldn't consider the abnormal state of our murky water from the pond.

Likewise, it is in 1 John 5:18: He sees the Christian, the child of God (that is born again and has a new nature), as what he typically is, as what characterizes him. It is absolutely not typical for a child of God to sin, or even to live in sin. It can happen, even though it shouldn't. We never want to take sin lightly. The new nature does not sin - that's how John looks at it (see also 1 John 3:9). As in chapter 3:9, the term “sins” here does not refer to the commission of a single sin, but rather denotes an ongoing process, a state of continual sinning. That is unthinkable for a child of God. Hope that helps.