Am I correct about traders?

What is the deal of having money in Steam wallet when you cannot spend it nothing else except games and related items?

Profit. They can buy more for their initial investment.

As you said there are ways to cash things out.

Although if I had to earn money on Steam I would create workshop items or develop good greenlight game.

I think it requires much more knowledge and skill to create something like that rather than learning how trading works. If I am wrong on this one correct me.

Not everyone can develop a game. Or design anything. Trading is the best option, and yes, we buy games during sales for discount prices and sell them later for more, the money received is used only in Steam. But it's better than spending money everytime, it's like saving your money by making more virtual money.

I've traded a lot, either to get games I want to play personally, or to give to friends, or to sell later down the line. Others have done better, but I've sold keys and games for PayPal for $100+ transactions a few times. It's not a full-time thing for anyone, but it's not a bad turn for unwanted bundle items and on-sale games. But then, of course, I discovered Steamgifts and started just giving things out.

Yep, it's usually like that. Buying games during sales and then selling them after the sales, in order to get profit. We usually sell games for keys or items or games. For example, if I'm going to sell a games for keys, when I get the keys, I'll probably sell them in the market to get steam wallet. Having a steam wallet means you can buy games and items. Why's that bad? By trading, you get free money and then you can buy free games. :P Yep, if you get a lot of +rep, you can do paypal trades as well.

Don't mess with keys (I should though, re: just making it harder on myself), but after a while you get a feel for the games that don't go on sale so often. Well, isn't too difficult, really.... as it's the publisher's decision. example: qvadriga being in a bundle was "Mind Boggling" (laugh) given that slitherine is the publisher there. also, that slitherine sale they had a few weeks ago, is something you wont see often. maybe twice a year, if you're lucky. But, then, the majority of games they publish are relatively niche war-game titles (many w/ that "old schoo"l hex style). My guess is the sales don't matter that much for their regular target consumer. Makes a bit more sense when you also realize that qvadriga is a bit of an oddity amongst their holdings. =p

http://store.steampowered.com/search/?publisher=Slitherine%20Ltd.

How many do you own? Not that many, probably... unless you're a fan of the genre.

.... and then on the other hand, you get the publishers that go on sale every other weekend --- I'm sure I don't have to name some of those.

I can name one publisher that I try to avoid.... that being 'AJ Tilley'. I believe they (or he?) is rebranded as 'Dharker Studios' now cough

ed: cheap games & marketplace.. man, it's killing me that I can't remember the name of this game... it is/was a 6 card set (maybe I'm mistaken about that, tho? could have been 5, 7, or 8 cards), & was the first game I can recall that I ever saw under 10 cents USD on Steam.... but the guy was smart.... this was back when sets were going for about 60 cents each... he'd drop his game down to 9 cents or something for a week, go back up to $1 or w/e normal price was, drop it back down to 9 cents, over and over. it was really rather brilliant. was before gun monkeys, spacechem, hero of the kingdom, & the 'second wave' started. ah, well. anyway, i reckon that dev discovered it was possible to make a lot more money from the marketplace than from selling his game. consider that probably 50% or more of the people are listing in 'high value currencies' (uh, I guess I'll call that AUD value or higher) -- even those 0.03 listings snatch 0.01 AUD for developer. the neat thing for Steam/dev is, that the 'high value currency' person can either be the buyer or seller. if they're selling the item, then they lose this fee upon the item being sold. if they're buying the item, then they're essentially paying this fee by not being able to bid less than 0.03 AUD. so only when two 'low value currency' regions are involved in a trade, is when the dev may not get a decent chunk of money. prior to gems, at least. i suspect nowadays the floor is around 0.01 USD (10 gems), possibly down to 0.0075 or so.

anyway, carried on a bit too much again. basically: all these cheap trash games, they can make more money from marketplace, than from selling actual game. though i did notice steam appears to have implemented some policy about those 10 cent games. i think i've seen one or two titles below $0.49 USD (US region) in last.... 6 months? i think this 0.49 thing is true for EU and UK also.

Implying all traders do Gift Trades.

Trading Steam gifts doesn't have the power or profit potential that it used to, because there are too many outlets for buying games now. No one has to put up with paying exhorbitant prices for anything anymore with the endless number of bundles and sales at places other than Steam. Most games on Steam are too expensive, even with a sale, by that I mean, that Steam's sale prices are no longer competitive with third-party distributors of keys.

Although if I had to earn money on Steam I would create workshop items or develop good greenlight game.

I hate to sound rude or anything, but that's a pretty ignorant thing to say (and I don't mean this in a disrespectful way).
Doing either of these things requires massive knowledge, efforts and work, and has high chances of failing rather than getting a successful outcome. Trading is hard work, but doesn't require as much resources and knowledge to be rewarding.