You can probably do this. Basically, the process is simple: boot the Windows installation disc. When the installer asks where Windows should be installed to, the installer will show some options. Choose the eternal disk.
The process might get to be a bit more complicated, because you might need some drivers to install. The installer should have an option to allow you to install drivers (perhaps by pressing a certain key while it starts up). If this is necessary, you'll probably need to get drivers that come from the manufacturer of the external drive. Details on that can vary, particularly among different manufacturers. (Since this question did not identify which drive is being used, specific details are not provided. I suggest checking the manufacturer's website.) However, I probably wouldn't bother researching this before just checking if the Windows installer auto-detects the drive just fine. If so, you probably don't need to worry about manually loading any drivers, so just choose the drive you want.