One of the most important things that a writer must do to be a writer is read (the other is write. In my opinion, that's basically it.). I am constantly shocked by my friends who are "writers" who do not read the books in the genre they write in. For example, I have a friend who is convinced that her life story would make a good memoir. Because people just love to have a real slice of Southern American life! But there's nothing really unusual about her life, and she has no real concept of the memoir genre. She's read one--count 'em, one--memoir in her life, and it was a memoir written about fifty years ago that has nothing to do with Southern America.
Furthermore, I also feel it is important to have not only the classics of a genre, but also the newest works. In my area, YA Fantasy, I see too often aspiring writers who jump to Narnia as a fav, without thinking of more recent books. I have to admit, I'm guilty of that, too...Narnia is my favorite books, ever. But I have to resist the temptation to read and reread them over and over again (as well as resist the temptation to emulate them). I make a conscious effort to buy new books from established authors (like Fairest by Gail Carson Levine) and new books from new authors (like The Princess and the Hound by Mette Ivie Harrison). In reading these, I don't look for trends or try to analyze what the market is/will be...I don't see how that would really help me. Instead, I try to see how these authors are keeping the YA Fantasy genre fresh, because that is part of my goal as a writer.