How can I install and use Xcode on external drive?

Hey there!

I recently tried installing Xcode from the App Store, but I got an error message saying I don't have enough space even though I have around 30 gigabytes. I then read a lot of forum posts and found out that I need about 50 gigabytes (which I don't have) to actually install it.

I downloaded Xcode from the developer site and installed it on an external drive, but unfortunately it doesn't work. After looking again for a solution or construction to install Xcode correctly on an external drive, I decided to ask for help.

I've tried Xcode version 12.3 and 11.7 and the external drive is formatted with Mac OS Extended (Journaled) as recommended in some posts.

Hope someone can help me

Thanks in advance!