This is not what is implied by a lot of naysayers of trading. Many of them assume that people can trade-up in the sense that you can trade an item you found for items that are worth more and repeat this process at a faster rate than if someone were to only kill monsters in dungeons which is the point you blatantly ignored. They bring issue to the idea that a player can only play the trading game and ignore and dungeon grinding completely to gear up their character without ever having to grind in a dungeon. Technically you can but I don’t agree that that route is faster than grinding dungeons. However, if someone wants to play that way, there is nothing wrong with that.
I think we all can agree that with open trading drop rates are decreased compared to a game with restricted trading and with restricted trading also requires character specific loot to only drop 99% of the time. So gearing “faster” is relevant by only comparing it more to a game such as Diablo 3 where trading is restricted and drops are much higher.
No, you are misunderstanding. “Similar” gear is not the correct word, the gear would be similar in value. This is easily understandable in the sense that an Ist rune could not be traded for a Jah rune in Diablo 2. I made this point that trading-up in D2 is a much more incremental process the majority of the time and depends on many factors.