Link exchange is link building tactic whereby one or more websites exchange links. Such an exchange of links is discussed an agreed on beforehand and results in advertising opportunities for the websites involved. Link exchange may also be a factor influencing link popularity.
The Google search engine assesses inbound links according to various criteria such as quantity, quality, relevance, domain strength, and many other factors. Inbound links can therefore influence Google ranking positively or negatively. However, Google Webmaster Central clearly speaks out against the manipulation of incoming links. In other words, any attempt to generate links in an “unnatural way,” including through a link exchange, represents a violation of Google’s Webmaster Guidelines. This does not necessarily mean that every link exchange will be penalized or result in the lowering of position in SERPs. As a webmaster, you need to be aware of the fact that swapping links is a violation and can have negative consequences in ranking.
There are two types of link exchange. In a reciprocal link exchange two parties exchange links mutually. This is the simplest form of link exchange since one party links to the other and vice versa. A non-reciprocal link exchange does not just include two partners that exchange links, but rather a network of several partners created by linking.
There are many ways to conduct a link exchange. There are link exchange forums, blogs, or chats where you can specifically ask other webmasters. Or you can use the opportunity to contact website operators yourself and ask for a link exchange.