To add what others already have
1) How are the authorities able to track our bitcoins?
By analysing utxo (the actual coins moving from wallet to wallet) on the blockchain. Even you could do this if you knew the addresses and coins involved.
2) How do we continue to remain anonymous while trading bitcoins?
You can't really. You can always be identified by your wallet, your username, your IP, many things. But P2P (trading with other people rather than with companies or intermediaries) is probably your best bet. Platforms like Bisq are safe enough and don't require KYC. You could, of course, be unknowingly trading with someone who intends to track or identify you. I trade majority p2p with people I've known for years. It's still a risk for sure, but that's a sort of trust circle that, if broken, they stand much more to lose.
3) Are there cryptocurrency exchanges that does not require our ID to trade in large quantity?
None I know of that you could trust enough. If they claim they do, they're not safe enough for large deposits.