No need to wait to evolve it since Cloyster doesn't learn any strong moves past level one. All you have to do is bring it to the Move Reminder at any Pokémon Center, so don't waste your watts on Hydro Pump at the Trader. The ideal move-set for this Pokémon would be Iron Defense, Ice Beam, Hydro Pump and Blizzard.

When should I evolve Shellder in Pokemon Red?

Cloyster can't be found in the wild in any of the three games, but you can evolve Shellder anytime by using a Water Stone. However, you might want to wait until level 50 to trigger the evolution -- unless you don't care about learning Ice Beam.

What is the best ability for Shellder?

Shellder's decent attacking stats and ability to hit 14 Speed make it a viable Choice Scarf candidate. Surf is Shellder's strongest STAB, and Ice Beam pairs well with it since it hits most Grass-types for super effective damage.