I have lost/forgotten the postgres password for my installation so I did the following.

I edited pg_hba.conf and added an entry:

local all all trust

restarted postgresql.

loged in as postgres (psql template1 -U postgres)

change the postgres password with

ALTER ROLE postgres PASSWORD foo

I edited pg_hba.conf and get rid of the added line

restarted postgres

when I attempted to reenter with 

psql template1 -U postgres --password

I get an error Peer authentication failed for user "postgres"

Not sure what I did wrong, any help would be appreciated.