No, he's not too young. You'll need to explain it to him, of course, but my DD started at age 6 and loved it.
At that age, I'd stick to trading with cast members for the most part. DS would approach a CM who was wearing a pin lanyard and ask if they would like to trade. (They will, but it's good to start by asking) The CM will show DS their lanyard and he chooses a pin to take and a pin from his own lanyard to give them in return. Then he says Thank You and everyone moves on.
I think it's the green lanyards that signal that that CM will only trade with children, but DD hasn't had anything but positive experiences with any CM trader.
DD has also traded with non-CM's, but while I hang back when she' strading with CMs, I hover when it's someone else. To be honest, we've only met really nice people through trading, but I've heard stories of sharks who will try to trade their $3 pin for that $30 pin DS doesn't realize he has. I realize that I worry about that too much, but I'd rather hover a bit than worry about it.
I odn't know if you've gotten any pins yet, but you can get pins to trade in a few ways. At the parks, you can buy starter sets that have a lanyard plus duplicate pins so you can keep one and trade one. Ebay is a good source for cheap pins (lots can be found for $3-4 per pin) but make sure that what you are buying is tradable in the parks - official pins are fine and worry-free in that respect. I've also heard that the outlets near WDW sometimes have pins on sale. While I tend to be cheap, DD will save up money so she can pick out pins at the parks, too. She won't usually trade those, but you can always buy duplicates and trade those.
Make sure you find out when the pin talk at MK is, too. That could be interesting and they will explain how it all works, as well.
Have fun! Pin trading can be a whole lot of fun! Addictive, but fun.
Ok DH and I were talking about and wondering what is pin trading? Thinking our 5 year old son might enjoy it. 
