—It has recently been recognized that the wireless networks represent a fertile ground for devising communication modes based on network coding. A particularly suitable application of the network coding arises for the two–way relay channels, where two nodes communicate with each other assisted by using a third, relay node. Such a scenario enables application of physical network coding, where the network coding is either done (a) jointly with the channel coding or (b) through physical combining of the communication flows over the multiple access channel. In this paper we first group the existing schemes for physical network coding into two generic schemes, termed 3–step and 2–step scheme, respectively. We investigate the conditions for maximization of the two–way rate for each individual scheme: (1) the Decode–and–Forward (DF) 3–step schemes (2) three different schemes with two steps: Amplify–and–Forward (AF), JDF and Denoise–and–Forward (DNF). While the DNF sc...