This is the process of getting links to your site on other sites by trading links. Why is it important? This process is important for purposes of SEO (Search Engine Optimization). Link trading is one of the many factors by which you may be able to increase your website's, search engine traffic and visibility.
Also known as Link exchange, this process is a crucial part of a search engine optimization scheme. To give a bird's eye view of how this whole link trading and link building process effects your search engine visibility, it can be simplified by saying that, the more site linking to your site, chances are you have a better rank in google's popularity contest. Although, this is not the whole picture, because you should also consider other factors with regard to the quality of links your getting, this is a very complicated matter which needs a very long discussion. For now, it is enough to remember the basic logic of link exchange and that is to have as many sites, link to your site in order to be popular amongst major search engines.
It can be done by different method and SEO professionals have varying approach relative to link building. But the core of all this effort would be to have as many site links to you as possible. The ever changing and dynamic industry of search engine optimization is quickly taking shape and because of this, the drive to understand and analyze search engine algorithms had become a race for search engine dominancy and different theories and strategies in optimizing a web site.