1 John 5:18 says, "We know that everyone who has been born of God does not keep on sinning, but he who was born of God protects him, and the evil one does not touch him." (ESV)
What is this verse saying? At first glance, one would think that John was saying that believers do not sin any longer. That's not entirely accurate and to get a better understanding of the verse, it's helpful to get a handle on the whole epistle itself. The apostle John doesn't write this epistle in a linear style where arguments and explanations build upon each other. 1 John has been described more like a symphony, wherein he returns in a circular fashion to topics he has touched on earlier in the epistle. In fact, John doesn't sustain his arguments for more than a few sentences but he returns to the same topics several times in the letter.
One of the themes that he touches upon several times is how the believer no longer belongs to Satan but belongs to God. The believer abides in God, his Word abides in the believer and God has put his Holy Spirit within the heart of the believer. Therefore, the believer in his core, is protected and cannot be touched by Satan any longer.
The verses that link together to help us get an understanding of 1 John 5:18 are as follows: 1 John 2:1, 1 John 3:6,7 and 1 John 3:9,10.
"My little children, I am writing these things to you so that you may not sin. But if anyone does sin, we have an advocate with the Father, Jesus Christ the righteous." 1 John 2:1
It's pretty clear that believers still do sin. We are after all, still in our sinful bodies. But God promises us an advocate, Jesus Christ, who will continually work in us to overcome our sin nature. So we will sin, but we have forgiveness through Jesus Christ and he is working to break sin's hold on us.
"No one who abides in him keeps on sinning; no one who keeps on sinning has either seen him or known him. Little children, let no one deceive you. Whoever practices righteousness is righteous, as he is righteous." 1 John 3:6,7
True followers of Christ do not keep going down the path of sin. The Holy Spirit works in us to turn our lives around. If we continue sinning, especially if it is habitual sin, then there is no way we can claim that we are believers. John says if we are no different after we claim to believe, then we do not know Christ at all! But true followers run after Christ and fill their lives with him. They replace sin with Jesus and they tear themselves away from the influence of the evil one.
"No one born of God makes a practice of sinning, for God's seed abides in him, and he cannot keep on sinning because he has been born of God. By this it is evident who are the children of God, and who are the children of the devil: whoever does not practice righteousness is not of God, nor is the one who does not love his brother." 1 John 3:9,10
Here again, John returns to the theme of true believers not continuing to sin. It's clear that John is saying that when a believer has the Holy Spirit in him, he breaks the bonds of sin. Our old sinful habits should weaken and fade the closer we are to God. We no longer belong to Satan but to God and so by the power of the Holy Spirit (and not with our own strength), we practice righteousness. One evidence that we are transformed by God is that we begin to love others. Thus our hearts are transformed and we will not keep on sinning. Will we make new mistakes? Definitely. Will we repeat some old sins? Occasionally. But we no longer live like we did: stuck in an endless cycle of sin after sin. We make progress towards righteousness.
And the cumulation of this point is made in 1 John 5:18.
"We know that everyone who has been born of God does not keep on sinning, but he who was born of God protects him, and the evil one does not touch him."
By the time we reach this refrain of the theme, we understand from John that true believers are protected by Holy Spirit. In our core, we are a new creation. The evil one cannot touch us in the sense of causing permanent spiritual loss, for we belong to Jesus and no one can snatch us out of his hand (John 10:28).
Ultimately, God will transform us to the point where we are like Jesus. Romans 8:29 declares that, "For those whom he foreknew [i.e., true believers] he also predestined to be conformed to the image of his Son, in order that he might be the firstborn among many brothers." Christ is the firstborn of the new creation. We will be his brother, bearing his likeness.
The reference to "he who was born of God" is a reference to Jesus Christ. In his physical birth, Jesus was "born of God" in that God the Father through the Holy Spirit put him into Mary (Luke 1:35). Also, in his resurrection, he was "born of God" because he was brought back to life (Col 1:18). Jesus is referred to as the firstborn. It fits in with the previous verses from 1 John that Jesus ("he who was born of God") is the one who protects our new life in him and Satan can never get a hold on us any longer.
If we look at the New Living Translation, what I've discussed above becomes absolutely crystal-clear: "We know that God's children do not make a practice of sinning, for God's Son holds them securely, and the evil one cannot touch them." (1 John 5:18, NLT).
This is a message of such great joy. We are no longer Satan's. We belong to Christ. And he works in us to transform us into his likeness. It's not that we are instantly sinless. Christ will make sure that we will not continue to get stuck in a cycle of sin and more sin. We will break the shackles of sin and be able to walk down the path towards righteousness. All by God's power and not our own effort. "So we do not lose heart. Though our outer self is wasting away, our inner self is being renewed day by day." 2 Cor 4:16.

