The problems with traffic exchange sites become even harder if we consider a specific type of traffic exchange websites: autosurfs. These are basically services in which you have to open a frame, and then leave it opened. The frame will automatically load websites on a specific time basis, while you are doing other things. In this case, the hits you get from users are completely automatic, and so they are fake. With manual surfs users are obliged to look at the website, even if also, in this case, they are not visiting it because of a true interest, but only in order to earn credits. Do traffic exchanges work? They don’t work as manual services, try to guess how they could drive genuine visits to your website as autosurfing services!
Another problem involved with traffic exchange services is that they provide you with visits to only one page of your website. Every user will still load the same page, without doing any other operation on your website. This will affect the Bounce Rate’s Google Analytics value badly, and it may lead you to get a lower ranking in Google SERPs. You can solve the problem by removing Google Analytics on your websites, but I think it would be much better to stop using traffic exchanges. Do traffic exchanges work? If your target is to get your website on the last page of Google search results the answer is yes: they work great!
I do not recommend traffic exchange services to promote your website, as they will provide you with artificial hits and no real benefits (you can even risk your AdSense account and your Google ranking). If you want to get more genuine traffic to your website than a mixture of quality traffic tool like Babylon with constantly updating your site, focusing on quality, SEO and to put every effort in making it an excellent product will surely do the job.