Linking to other sites is important for enhancing your website's search engine ranking and to bring more traffic to your website; thereby generating more business for you. But linking with irrelevant and blacklisted sites can backfire and your website too might get black listed and or penalized by the search engines (something which you will not want for sure). Moreover, you will lose genuine visitors if you provide links to such irrelevant / nuisance websites on your own website. In general it will bring down the quality of your website.
Trading links with blacklisted sites should be avoided. Websites which deal with multiple sites under the same identity, websites that contain pornographic material, racist websites, illegal or illicit websites that are involved in harassment / stalking / fraud, and websites that plagiarize / copy content etc from other websites can be easily identified. Such websites generally end up getting blacklisted with search engines and you should avoid them at all costs. If you have any links with such sites your website might get blacklisted too.
Sites that exist primarily to sell products and services should not be linked to (mostly, such websites would not be ready to trade links anyhow). If the website has information and content on the use of product(s) it is selling, it can be of use and can be linked to. But sites which contain only prices and specifications of particular products and services might not be of any interest to the visitors of your website (in most cases, unless the product is a very popular one or the website has a good ranking). Moreover, you don't want to flood your website with links that don't contribute much to enhancing your website's ranking; your better off searching for better websites to trade links with.
Do not link with sites that are accessible through specific browsers and software, and require payment to view the content. Sometimes, such sites hang the computer and put users to inconvenience. The users will not pass through to your site in such situations.
Generally, it will be helpful if you trade links with compatible sites that are easily accessible. Take judicious decision for linking, else it may backfire and defeat the whole objective of linking.
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