It is not possible to reduce the loss completely, for that we should not trade for it. But, with smarter risks, we can reduce the loss a little.
Cutting our losses is just reducing only our possible losses, so even if a little, it's considered at cut loss. Risk management is the key here, every successful trader has their own risk management because I believe that it is much better to earn small profits slowly but surely than earning big profits but you may also lose hugely.
Thats the way by cutlose, you really need risk management to be used, you have to look at market conditions and determine where the price will go, then you can determine whether to sell or hold, if the price falls then you can minimise the loss by selling it