Welcome to the Q&A Forum

If the site were still up, you could verify it in Google Webmaster Tools, put up a robots.txt for that subdomain that excludes crawlers from crawling anything, then go into GWT and request the entire subdomain be removed.

Doing this could help you in the short-run, but the old domains will lose all their links eventually, so I wouldn't count on it as a long-term strategy.

As with any link building strategy / method, it all depends on the quality of your link wheels. A poorly built link wheel will provide no noticeable results and in the worst case, you'll end up with a penalty. A properly built link wheel, will take more time (and/or money) to build but the results will be up there, you'll get increased keyword rankings and also indirect traffic from the link wheel sites, and contrary to popular belief, if you build it right, google will not be able to spot it and you'll be penalty free. If you plan to build a link wheel, I would recommend you to read all the resources at linkwheel.pro before you start building one.

Your terminology of "one-way" and link "exchange" would seem to be in conflict. Since it seems that you're not really talking about one-way, but actual link exchanges, I'd echo what searchpl says: be really careful. In my opinion, the risk is far greater than the potential reward, and you'd be better off acquiring true one-way links.

1. I believe the website shall be of the same niche specific industry as of my site for which i am doing link exchange.  I will not like to exchange links with any websites which do have good site or ranks etc but not of my niche industry to ensure quality get maintained. 2. I am new thus i will be doing link exchange direct not 3 or 4 ways since that must be complicated to search and practice. Do you think it shall be good enough to start link exchange or any other suggestion to it ? Also i want to know in start is it ok if i place a website link in my directory and then invite the owner to check and add my link back in exchange or i shall email them talk to them then shall proceed to link exchange. And my other question is Google Panda update against link exchange or its still worth for link exchanged to good sites for SEO and traffic reasons ? Regards! Anand

When we were building links we would go straight to websites that are ALREADY linking out to great content in our niche and ask them to consider our content for a link.  When we found sites like that we would build better content than they were already linking to. We no longer do linkbuilding.  Instead we spend all of our time on content creation and our visitors on their own submit our content to sites like stumbleupon, slashdot and reddit and that exposure creates links with no effort from us. IF you can create linkable content you can eliminate the work of linkbuilding.  Progress that way is slow at first but after your traffic starts growing it works exceptionally well.

There is absolutely no reason why you can't turn it all around again To a degree, one of my customers also took a hit and with the changes we have made, they are starting to see rankings working their way back up again. Remember to stick closely to the Google Webmaster guidelines and you will be fine - just don't try anything that could be seen as dodgy in any way and keep hitting that content hard. Regards, Andy