This is a tough question for beginning writers--and the advice can be confusing.
One of the agent blogs: Caren Johnson, has a post on whether a writer should read or not. And that got me to thinking about the whole subject.
What works for me, so well, (so well that it has been an ongoing writing course): critical reading or critique reading. Donald Maass, another agent and the author of Writing the Breakout Novel, suggests strongly doing this. It does negate some of the pleasure of being a reader, because you're always working on your craft while reading--but it is such a valuable tool.
So, critique reading: when I read I pay attention to several different things: First and absolutely foremost is: Do I "stay in" a work of fiction? Do I continue to read, despite distractions? Despite needing to make dinner? Despite a work schedule? Despite it being 2 a.m.? If I have to put the book down do I find moments to snatch it up again and read a paragraph, or only a sentence? Critical reading means noticing when that happens and asking WHY? What has the writer done to keep me so engrossed? And what have they avoided doing (pages of only description, for example)?
Or, do I put the book down a lot and walk away? WHY? Why am I NOT compelled to read on? Sometimes this is the best teacher--what stops me? And horrors of horrors--when I don't finish a book, that's when to really think--what made me "give up" on a novel? Sometimes the answers surprise me.
But it's no surprise how valuable developing a "critiquing eye or eyes" while reading is. Margie Lawson in her fabulous workshops uses many examples of excellent writing, as does Donald Maass. When I first starting attending I used to think "That's great, but that author is a best-selling writer and I don't want to just imitate them!"
With "critique reading" there's no chance of inadvertent imitation and plenty of opportunity to learn better writing techniques!
TIP: After I read a novel, I sometimes go online and read the Amazon critiques--and learn that readers catch the same things as a writer does--another valuable lesson.