doc: add more context for extension

Author: HerringtonDarkholme

README.md

@@ -12,7 +12,7 @@ Note, code linting and code actions requires [setting up `sgconfig.yml`](https:/
 
 ## Requirements
 
-- [ast-grep](https://ast-grep.github.io/)
+- [ast-grep](https://ast-grep.github.io/) binary in your path.
 
 ```bash
 # install via npm
@@ -25,6 +25,19 @@ cargo install ast-grep
 brew install ast-grep
 ```
 
+- setting up ast-grep project.
+
+  This is an optional step to enable code linting and code actions. It requires at least one file and one folder to work:
+
+  - `sgconfig.yml`, the [project configuration file](https://ast-grep.github.io/reference/sgconfig.html)
+  - a directory storing rule files, conventionally `rules/`
+
+You can also use the [command line tool](https://ast-grep.github.io/reference/cli/new.html) to set it up.
+
+```bash
+ast-grep new
+```
+
 ## Extension Settings
 
 This extension contributes the following settings: