From the menu (right click) select Tools -> USB Installation
You will need certain extensions installed - It will tell you.
I used the Ext option.
This will include something like this with the UUID of your USB drive.
tce=UUID="b647c07e-d1f2-461a-9d4a-045b450ad1fd"
When you use tce=sdb1, if you put the USB drive in another computer, it may be sda1, or sdc1, or sdd1, so it will not work. With the UUID it will work in any computer (which boots from a USB drive).
You can also edit extlinux.conf and add,
home=UUID="b647c07e-d1f2-461a-9d4a-045b450ad1fd" opt=UUID="b647c07e-d1f2-461a-9d4a-045b450ad1fd"
using the UUID of your USB drive.
Install extensions while running from the USB drive. Another option is to copy and paste extensions to the tce directory.
There are also other ways to do this. This way works.