Harris calls chapter 14 the most important chapter in the book. Bold claim for page 297, but he backs it up. The lesson is simple and painful: uninformed traders lose money no matter what they do. Not because they pick the wrong side. Because they trade at all.
Dealers are merchants. They buy low, sell high, pocket the difference. If you ever bought a used phone from a resale shop, you understand the concept. The shop bought it for less, sells it to you for more. Financial market dealers do the same thing with stocks, bonds, and currencies.
Book: Trading and Exchanges: Market Microstructure for Practitioners Author: Larry Harris Publisher: Oxford University Press, 2003 ISBN: 0-19-514470-8