Postgresql one master multiple slaves failover
I manage to solve it with dezso's help.

I used cascading replication for this. Current architecture is like M -> S1 -> S2.

Master: 10.10.10.146,
S1: 10.10.10.130,
s2: 10:10:10:160,

First of all I created repuser in all three systems with below command.

sudo -u postgres createuser -U postgres repuser -P -c 5 --replication


It will ask you to assign a password, type anthing you like and repuser will be created. We will use this user for replication related operations.

On Master server current configuration is:

postgresql.conf

listen_addresses = 'localhost, 10,10,10,146'
wal_level = hot_standby
archive_mode = on
archive_command = 'test ! -f /here i wrote full directory starting from root/%f &amp;&amp; cp %p /here i wrote full directory starting from root/%f'
max_wal_senders = 3


pg_hba.conf

# Allow replication connections
host     replication     repuser         10.10.10.130/32        md5
host     replication     repuser         10.10.10.160/32        md5
# IPv4 local connections:
host    all             all             127.0.0.1/32            md5
host    all             all             0.0.0.0/0               md5
# IPv6 local connections:
host    all             all             ::1/128                 md5


After this configurations restart master server.

Now we need to get full backup from master to S1. First stop the postgresql service on S1. Then remove the data directory (directory is var/lib/pgsql/9.5/data for my system). After removing run full backup command:

sudo -u postgres pg_basebackup -h 10.10.10.146 -D /var/lib/pgsql/9.5/data -U repuser -v -P --xlog-method=stream


This will copy the data folder to S1 server. Now open postgresql.conf in S1, and make below changes

listen_addresses = 'localhost, 10,10,10,130'
wal_level = hot_standby
archive_mode = on
archive_command = 'test ! -f /full directory starting from root/%f &amp;&amp; cp %p /full directory starting from root/%f'
max_wal_senders = 3
hot standby=on


Open pg_hba.conf and make below changes:

# Allow replication connections
host     replication     repuser         10.10.10.160/32        md5
# IPv4 local connections:
host    all             all             127.0.0.1/32            md5
host    all             all             0.0.0.0/0               md5
# IPv6 local connections:
host    all             all             ::1/128                 md5


And finally create a recovery.conf file under data folder. recovery.conf should be like:

standby_mode=on
primary_conninfo='host=10.10.10.146 port=5432 user=repuser password=password_of_repuser'
trigger_file='/full directory starting from root/any_folder_name'


For example if you write trigger_file = '/tmp/trigger_failover' in recovery.conf file, then create a folder under /tmp directory named trigger_failover, S1 will start failover process and will start to serve as master server.

After above configurations start S1 server and now M and S1 should work as master and slave. Next we need to configure S2 server. Steps are pretty much same as configuring S1.

First stop the postgresql service on S2. Then remove the data directory as we did in S1. In my case S2 has same folder architecture  with S1, so data folder is also present in /var/lib/pgsql/9.5/data directory. Now run below command this time we will get full backup from S1 server.

sudo -u postgres pg_basebackup -h 10.10.10.30 -D /var/lib/pgsql/9.5/data -U repuser -v -P --xlog-method=stream


No we will change configuration files in S2. In postgresql.conf make below changes:

listen_addresses = 'localhost, 10,10,10,160'
wal_level = hot_standby
archive_mode = on
archive_command = 'test ! -f /full directory starting from root/%f &amp;&amp; cp %p /full directory starting from root/%f'
max_wal_senders = 3
hot standby=on


And in recovery.conf make below changes:

standby_mode=on
primary_conninfo='host=10.10.10.160 port=5432 user=repuser password=password_of_repuser'
recovery_target_timeline='latest'


And you are finished. Now start postgresql service in S2 and see replication mechanism work in M, S1 and S2.

By this architecture: 


if M goes down, you can trigger S1 and make it work as new master and
S1 will have replication with S2. 
If S1 goes down you can easily point S2 to M just changing
primary_conninfo command in recovery.conf file in S2 and you will have
replication with M and S2.
And finally if S2 goes down M will still have replication with S1.