Link activity is the number one factor that the search engines focus on when determining your pagerank.
Don't worry if you don't know what this means, just read below.
Inbound links are simply links that point in to your site.
Outbound links are the sites you link to from your site.
Internal links point to other pages within your site, from any part of your own site.
Reciprocal linking is a basic link swap.
This is when you like someone's site and they like yours, so you agree to swap links.
They are not as valuable as one way inbound links.
Google looks at the number of outbound links you have from your website and compares this to how many inbound links are pointing in towards your site.
If you have many more outbound links, than inbound it can have a negative effect on your page rank, meaning less traffic and less sales for you.
Some people focus all their energy on getting one way links through directories and articles, but this can take a lot of time and the sites aren't always related to your niche (Google prefers it when they are).
There is another way and it is far more effective.
It is called Three Way Linking and literally catapulted one of my unknown sites to the top of the search engines, which in turn helped me to get out of debt.
Three way linking is an ingenious strategy and can work in many different niches.
It has already worked wonders for a lot of people.
So how does Three Way Linking work? As you know, normally when setting up a reciprocal link to a site, you link site A to site B and vice versa, whilst this is no bad thing, Google much prefers one way links and will reward your site with a higher page rank if you have these one way links coming in.
Three way linking uses three different sites from one niche.
Site A links to Site B, Site B links to site C and site C links back to site A.
This means that the links are of very high quality, as each site has one unique link pointing towards them.
In conclusion, this technique is much more helpful and effective, than spending ages chasing down reciprocal links.
You don't even have to find three way links manually, as there is software that can do it all for you.
Basically once you have spent 5 minutes setting it up, you can set it and forget it.
When you check back you will see an increase in page rank, traffic and sales.