What are similes?
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A simile is a comparison between two things that are kept separate. In short, it is to say that someone is as happy as a clam (an English cliche simile that probably isn't used in other languages this posting may be translated to). In a simile the comparison is limited. If I say that Hank is as happy as a clam, I am not indicating that he is as wealthy as a clam with a pearl. I am not saying that he has a shell like a clam, or any other comparison you may think of. I am limiting the comparison to Hank's state of happiness.
What are metaphors?
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A metaphor is comparing two things by saying that they are, in fact, the same thing. To reference my cartoon, it is to say that someone stabbed you in the back. If Mary says her friend stabbed her in the back (an English cliche metaphor), she is opening up the comparison to mean many things. Her friend hurt her just like stabbing would hurt. Her friend surprised her with the betrayal just as if she had been stabbed from behind. Her friend's betrayal was wrong just like stabbing a person is wrong. Any comparison that you can think of between stabbing a person in the back and betraying them would be considered right.
Why use similes and metaphors?
Similes and metaphors add to the effectiveness of writing if they are used correctly. Especially if the comparisons are ones that the reader hasn't heard/read before. They can help to paint a scene because they bring sharp pictures to the reader's mind. By showing how the characters are thinking and reacting to the things around them. If the main character confronts a tiger and the simile/metaphor used is something about how pretty the striped fur is, then obviously he or she has a reason to be calm. If the same character confronts a tiger and the simile/metaphor is about how horrible the teeth and claws are, then the reader will be more likely to envision the frightening situation and the character's fear.
Be careful with cliches. As with almost every rule, I disagree with the idea of NEVER using a cliche. But you need to understand that if you use a cliche then it will stand out. If you have a character that likes them then go for it sparingly. However, even a character that uses cliches will start to get old if he or she throws in too many. Just make sure that you have a reason any time you add any type of cliche.
Don't overuse this tool. Like most tools, similes and metaphors can be overused. They should be peppered in to add to the scenes. They should not take over the prose. How much is too much? I'm afraid you'll have to decide that on your own. Every person's writing style is different, which is a good thing. Some people use more than others. They best way to know if you should add more or take some away is to get feedback from an editor or from a reading group.