Here's how it works:
1. Reach the Lake of Rage: You'll need to travel through the Indigo Plateau and reach the Lake of Rage. This is where the Red Gyarados resides.
2. Use Dive: You need the Dive HM to dive underwater in the lake.
3. Find the waterfall: At the bottom of the lake, you'll see a large waterfall.
4. Swim down: Dive down the waterfall and you'll find yourself in a hidden area where you can encounter the Red Gyarados.
Remember, this Gyarados is a very powerful Pokémon, so be prepared for a tough battle!