Trim loss is that part of your original amount of wood that is lost in the process of installing your siding. You may lose some because you find a knot that is unsound and you'd rather not have that weather exposure (even in the best grades of knotty siding there will likely be some). You will lose some because there is a split on one end or other (even in the best grades of knotty there is bound to be some). In cabin grades there will be a greater amount of the above mentioned characteristics. In addition there may be some wane (bark material) on one edge or pockets of unsound wood or something else that you determine you'd rather not put on your wall. Some trim loss will occur when you have an installation space of 11'5" between windows and you trim away 7 inches from a 12 foot long piece and don't have a good place to use that 7 inch piece. The 7 inch piece may = kindling wood for Saturday nights' fire (trim loss).
Most contractors allow for a trim loss of about 10% in T&G and Channel Rustic patterns and about 15% in Bevel patterns when using Select Knotty grade. On Cabin Grade installations you can expect about 25% trim loss on T&G and Channel Rustic patterns and about 40% in Cabin grade Bevel patterns. Each individual is different in their installation techniques and strategies as well as the standards they apply to their siding application. You may need less or more than the recommended amounts.
The best strategy for utilizing Cabin grade since there will be a significantly greater amount of trim loss than with high grade is to go through the batch of wood in it's entirety before installation begins. Trim and sort the siding into separate lengths of useable material. Then you will be able to choose the right length for the application during your installation without the frustration of always having a 6 foot piece in hand when a 7 foot piece is what would be ideal. This should be done by the homeowner before installation. It is especially important if someone else is going to do the installation for you.