Here's how:
Connect external drive to Windows VM. You must have a Windows VM in VMware/Parallels/VBox, or a Windows PC. Any existing Windows environment will do.
What you need:
install.wim file (obtain this from your Windows ISO)
Open elevated cmd.exe (run as admin)
Note: All commands aren't case sensitive, including pathway to files.
Type diskpart
Type list disk
Take note of the disk you want to select
Type select disk 1 (if your disk is Disk 1)
Type clean
Type convert gpt (stop at this point if you're using a Thunderbolt drive)
Type create partition EFI size=100 (skip if installing in BIOS-CSM)
Type format quick fs=fat32 label=EFI (skip if installing in BIOS-CSM)
Type assign letter=S (skip if installing in BIOS-CSM)
Type create partition primary
Type format fs=ntfs quick label=W2G (or any other name you wish for label)
Type assign letter=E
Type exit
Open up File Explorer. In your C drive, create a new folder named WIN2GO.
Put the install.wim file in this folder
Back in cmd.exe:
Type dism /apply-image /imagefile:C:\WIN2GO\install.wim /index:1 /applydir:E:\ (this process will take quite a while)
Type E:\Windows\System32\bcdboot E:\Windows /s S: /f UEFI - use this one for UEFI installation
Type E:\Windows\System32\bcdboot E:\Windows /s S: /f ALL - use this one for BIOS-CSM installation
Restart your entire Mac. After the chime, hold down Option and when prompted to select your boot drive, select EFI Boot.
Proceed installation normally.
After installation, install Boot Camp drivers. Feel free to trash the VM once you're done too.
For best results, use USB 3/Thunderbolt. If you don't have USB 3, use Thunderbolt. If you have neither, stick back to the internal drive
Note: This method involves reformatting the entire external drive.
For Thunderbolt drives, just boot from the Windows USB installer and install directly onto the TB drive. Windows sees TB drives as an internal PCIe connection. However, you must format the TB drive as GPT first.
CAUTION: Windows can only be installed in UEFI flawlessly on Haswell Macs and later. Ivy Bridge and earlier Macs can only run Windows in BIOS-CSM flawlessly. Attempts to boot a UEFI installation of Windows on an Ivy Bridge or earlier Mac will result in driver issues.
UEFI-compatible Macs:
MacBook Air (mid-2013 and later)
iMac (late-2013 and later)
Retina MacBook Pro (late-2013 and later)
Mac Pro (trashcan shape)
Mac Mini (late-2014 and later)
Non-retina MBPs are not UEFI compatible.
WinToUSB basically does the same thing, but doesn’t always work because WinToUSB doesn’t really take into account between BIOS-CSM and UEFI Macs; it only uses one method for all (which may result in boot failures and other problems).