You have to put a tag in front of and after the link. So, for your case, you can just highlight the URL, click the Image button above (can't do this in Quick Reply), and then it'll show up, like this:
The actual code when you type it out is here:
The link you used doesn't work, though, as it's not the actual image link. You have to view the link, right-click, choose "Copy Image Location", then paste that into the message (it's quite large, in this case). Then highlight the whole thing and click the Image button above.
Also, you can always upload your photos to the
Gallery!