My reading of James IS correct. Sorry —
Your understanding of James misses his argument before and after the passage you quote.
Perhaps you should outline the argument in James and see how your passage supports that argument.
In the meantime, no doctrine is based on a single passage. Doctrines are based on the totality of the Bible’s teaching about a topic. I suggest you add Galatians and Romans to your study. You will learn that justification is always based on faith and not works.
Take that understanding with you back to your outline of the book of James.
Blessings to you.