Abstract-Future 5G networks have stringent end-user requirements on data rate and error performance. In order to satisfy these requirements, innovative wireless networking technologies and models need be researched. One particular example is the two-way relaying channel, which can have as much as 100% higher theoretical data rate than current systems where transmissions are arranged in an orthogonal manner. However, benefits of this model cannot be achieved without the application of proper relaying protocols. This paper proposes a novel protocol that directly addresses the problems of existing protocols of twoway relaying models, e.g. analogy network coding and physical network coding, and has improved performance. By combining direct and differential demodulation-forward schemes based on wireless channel qualities and signal to noise ratio, a new hybrid protocol is created. Theoretical analysis and numerical experiments show that the proposed solution has lower error rate than the existing ones, and can thus be applied to support future 5G networks.