A good dot-matrix printer, or an electric typewriter, can also produce acceptable material. If your dot-matrix printer has a pale ribbon and you can't replace it, at least make a darker photocopy of the original printout. Consider your choice of font . A boldface font would be even worse . A serif font, like that used in most printed text, is most readable.
Text size is also important.
But when I asked this question of my own publishers, they expressed no preference one way or the other. Of course, if your publisher does have a preference, then by all means follow it. If you must use fanfold paper in a dot-matrix printer, make sure it's reasonably heavy. You will of course separate each page and remove the strips on the sides. Give yourself margins of an inch at top and bottom, and an inch or an inch and a half on the sides.