guys, My website has been penalized form Google panda 2.5 algorithm update so i want to know that how can i recover my website previous ranking in search engine and traffic both. help me

Some of the stuff that works for me is -

1) Reducing the above the fold ads increases traffic from google.
2) Have a better blog design and that way you can easily increase user retention.
3) Just get more backlinks.

This stuff works for me. Also don't follow every advice of google otherwise you'll never make site out ofpanda. Google gives false information sometimes for a purpose because they violate their own rules.

There are certain criteria as follow you should check out with :

1. Get some quality content for your website
2. Amend broken links (404) & Enhance structure of each url
3. Avoid too much use of flash (loading page)
4. Avoid submission in article websites & spamming
5. Never use Black hat tricks for SEO
6. Remove too much advertisements if you have on your web page