For the sake of making it more real-world, setup has also a build step (here with TypeScript).

I've put together an article which explains most of the code from this repo: Docker Compose for NodeJS and PostreSQL

docker-compose up --build

curl http://localhost:3000/ping
# {"environment":"development","database":"up"}

Don't keep .env file in the repo. It's here as it makes demo example simpler.