The easiest way is to use the "template_private" project when requesting a project. You can however change the permissions after creation as follows:

1. Log into Forge
2. Navigate to your project
3. Select Admin on the left hand sidebar
4. Select "Edit Observer Permissions" under the Admin Options box
5. Change the values to private as appropriate

The change in status is made via a cron script, so you may have to wait up to an hour for the change to take effect.