docs: add project setup instructions to README

README.md

@@ -3,3 +3,38 @@
 To install navigate to: **Zed** > **Extensions**. Or use the command palette ([macOS](https://github.com/zed-industries/zed/blob/main/assets/keymaps/default-macos.json#L581), [Linux](https://github.com/zed-industries/zed/blob/main/assets/keymaps/default-linux.json#L459)) to search `extensions`.
 
 This extension integrates the [Postgresql Language Server](https://github.com/supabase-community/postgres-language-server).
+
+## Project Setup
+
+The language server will not provide diagnostics, autocomplete, or hover until it finds a configuration file. **You must create a `postgres-language-server.jsonc` file at the root of your project** and fill in your database connection details.
+
+### 1. Create `postgres-language-server.jsonc` at the project root
+
+```jsonc
+{
+  "$schema": "https://pg-language-server.com/latest/schema.json",
+  "linter": {
+    "enabled": true,
+    "rules": {
+      "recommended": true
+    }
+  },
+  "db": {
+    "host": "127.0.0.1",
+    "port": 5432,
+    "username": "postgres",
+    "password": "postgres",
+    "database": "postgres",
+    "connTimeoutSecs": 10,
+    "allowStatementExecutionsAgainst": ["127.0.0.1/*", "localhost/*"]
+  }
+}
+```
+
+Replace the values under `db` with your own connection details. Use the discrete fields shown above.
+
+### 2. Reload Zed
+
+Reopen the workspace (or restart Zed) so the language server picks up the new configuration.
+
+For the full configuration reference (linter rules, formatter, type checking, etc.) see the upstream [Postgres Language Server documentation](https://pg-language-server.com/latest/).