In this paper, we consider a two-way relay with multirelays. We first review the joint decoding (JD), decoding by parts (DP), bit-level exclusive-or (XOR), and superposition coding (SC) schemes for the two-way decode-and-forward relay (TWDR), and then propose a new TWDR selection scheme for the two mentioned coding methods. In particular, we focus on the outage performance analysis of the relay selection strategy using the aforementioned coding and decoding methods. Based on an approximate analysis of the outage performance in the high signal-to-noise ratio, we present the diversity-multiplexing tradeoff for the considered decoding and coding schemes. Moreover, we present an optimal power allocation for relays with the SC mechanism. Our simulation results show that our proposed relay selection strategy is outage optimal for all the coding and decoding methods mentioned in this paper. Our results also show that the outage performance under the JD-Xor and JD-SC schemes is more competitive for the case in which the channel statistical characteristics satisfy (gamma) over bar (a)sigma(2)(ka) approximate to (gamma) over bar (b)sigma(2)(kb) ((gamma) over bar (i) = P-i/N-0, i is an element of{a, b}, where a and b denote two sources exchanging information with each other, P-i is the average transmitting power from the i source, N-0 is the variance of additive white Gaussian noise obtained by the relay k, and sigma(2)(ki) is the variance of the Rayleigh fading channel between k and i). When (gamma) over bar (a)sigma(2)(ka) >> (gamma) over bar (b)sigma(2)(kb) or (gamma) over bar (a)sigma(2)(ka) << (gamma) over bar (b)sigma(2)(kb), the outage performance using DP-Xor or DP-SC mechanisms is much better.