How to force VSCode to use locally installed TypeScript

I assume that you have installed TypeScript in the myProject directory.

cd myProject
npm install --save-dev typescript

If you have already done that, then add a .vscode/ directory with a settings.json file that specifies the TypeScript SDK to use:

{
    "typescript.tsdk": "node_modules\\typescript\\lib"
}

This is the final directory structure:

myProject
  .vscode
    settings.json
  node_modules
    typescript
      lib

Important: make sure that you open VSCode in the myProject directory!

The VS Code documentation calls this "using the workspace version of TypeScript."