Observer 1 observes 2. The observer 1 can see that time in frame 2 is flowing slower according to the formula: 
Observer 2 observes 1. The observer 2 can see that time in frame 1 is flowing slower according to the formula: 
Shortening of time, observed mutually, is not the real shortening of the time in the observed frames but only the effect of performing the observation – because the space axis of the observer has to be perpendicular to the trajectory of the observed body in the FER. 

THEREFORE, WE CAN NOW ASK THE QUESTIONS: In which frame the time is really shortering? What is the cause of the observed shortening of the time becoming the real shortening of the time? If the observed shortening of the time is not the real shortening, but only an effect of observation, then why the real shorteninig is equal to the observed one? BEFORE WE ANSWER THESE QUESTIONS, LET US CONSIDER THE FOLLOWING CASE: 