1st the mode of the Bluetooth module has to be set using AT commands

upload following code to Arduino Nano :

#include <SoftwareSerial.h>
SoftwareSerial mySerial(11, 12); // TX, RX

void setup() {

Serial.begin(9600);

Serial.println("Enter AT commands:");

mySerial.begin(38400);

}

void loop()

{

if (mySerial.available())

Serial.write(mySerial.read());

if (Serial.available())

mySerial.write(Serial.read());

}

then to put the Bluetooth module into AT command mode do connections as bellow.

press and hold this button at the time of powering up that puts the HC-05 to AT command mode.

open serial monitor and type those following lines:

AT+ORGL
AT+ROLE=0
AT+POLAR=1,0
AT+UART=115200,0,0
AT+INIT

 115200 is for Arduino Nano with new bootloader  for old bootloaders change it to 57600

if AT+INIT gives any error ignore it as it means the command has already been executed

the name of the Bluetooth can be changed also for better reference using,

AT+NAME=nano-hc05-port

after each AT command the hc-05 should return OK

As the Arduino Nano requires a high-low-high pulse to go into programming mode, A circuit is needed to provide that pulse at the correct time.

the NOT gates and the R-C circuit is used to add a delay before the signal is passed to the next NOT gate.

When input is 5v the output of XNOR will be 5v. the moment the input changes to 0v one input of XNOR will receive 0v but because of the delay the other input pin will be at 5v momentarily which makes the output of the XNOR gate to 0v. After some moment both the input pins are 0v so the output becomes 5v again.

This creates the short pulse that is needed for the Arduino Nano to reset.

connect as shown bellow, 

add the Bluetooth and check the outgoing com port.

go to Arduino ide select the correct port and click upload