Rules on when to read characters in sequence
There is actually no straightforward way except base on your own experience. And this is one of the biggest problem leads to misleading, especially in ancient Chinese. Taking examples:

Confucius Lun Yu （论语）

民可使由之不可使知之

can be understood by:

民,可使由之;不可使知之 -- (The governor) can make use of the people, but cannot let them know the purpose.

民可，使由之;不可，使知之 -- If people are allowed to do something, let them do it; otherwise, let them know why they are not allowed.

An old funny story in my memory

下雨天留客天留我不留

下雨天留客,天留我不留 -- As a guest, even the god wants you to stay (in my home) because of the rain, I won't let you stay.

下雨天,留客天,留我不?留! -- A rainy day is a day that the guest should stay, should (you) let me stay? Sure!

Even in modern Chinese, the problem still stay:

我们中出了一个叛徒

我们 中 出了 一个 叛徒 -- There is one betrayer in us.

我们 中出了 一个 叛徒 -- We had sexual interaction with a betrayer.