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I think you should go for repair manual first for your vehicle after that it will be easy for you to solve the problem. Check the link may be you will get something useful here 2002 BMW 318i Workshop Service Repair Manual
Please refer to the owners manual for red light warning, it can be low oil pressure or hot engine or emissions system. If you don't have an owqners manual you can find used ones on eBay Motors.
BMW Owners manual. 1998 BMW 318i 4DR E36 BMW
318i CONV E36 BMW 318is 2DR E36 BMW 323i 4DR E36 BMW 323i CONV E36
BMW 323is 2DR E36 ...data.bmrparts.com/bmwparts/1610.html have just checked this site out and the have a manual for yr bmw - hope this will help-
It's possible that you have a bad head gasket. Have your cooling system pressure tested, see if it holds roughly 18lbs of pressure. Could also be air in system, did you bleed system when waterpump and thermostat were installed?
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