Linking can be done in two ways:

1.One way linking or Submission :-
One way linking or Submission involves the linking of your site to other website through submissions. Submission can be done via; - submit forms, e-mails etc. With submission you are increasing the links to your site which inturn helps you to improve the page rank of your website and also improve the listing of your website in the search engine. One way linking or Submission is a long process because your website will be first reviewed by the Webmaster of the website whom you are requesting to submit your site.

2. Two way linking or reciprocal linking or link exchange: -
Reciprocal linking is simply a give and take policy. It is one of the most important SEM tools for attracting huge net traffic to your site and (is done by) showing a text link or banner link to a site, which in return is showing a similar text link or a banner link to your site.

Note:-

a) The link can be shown on any of your HTML page but it should be mentioned clearly to your linking partner.
b) Work out a focused linking strategy for developing a good reciprocal link to your site as this will help you in getting a good ranking in the search engine.
c) As reciprocal linking holds the key to your web promotion effort, one should maintain good quality and quantity of reciprocal links. Eliminate any dead links to your website on regular basis as it will otherwise, lead to loss in search engine ranking.

Benefits of Two way linking or reciprocal linking or link exchange: -

1.Cost:-
Reciprocal linking is free, therefore webmaster are always in a no-loss situation.

2.Incoming net traffic:-
Effective links to your site may not act as a treasure for you but will never the less bring a difference in the incoming traffic to your site.

3.Quality linking:-
Your one reciprocal link with a highly reputed and known website is far better then linking to 200 poor websites in content and ranking, this will help in referred traffic coming from the high traffic site you are linking to.

4.Important for search engine ranking:-
Research shows that all free search engine tend to increase your site ranking on the basis of popularity and valuable reciprocal links (in and out) to your site.

5.Acts as a parallel traffic source:-
Reciprocal linking is a reliable and dependable source of incoming traffic to your site unlike the ever-changing methods and techniques of the free search engines.

6.Name game: -
The more and more links to your site will help your site's name to appear in all search engines there by making the surfer more SITE FRIENDLY.