SIMILE

A simile (/ˈsɪməli/) is a figure of speech that directly compares two things. Although similes and metaphors are similar, similes explicitly use connecting words (such as like, as, so, than, or various verbs such as resemble),though these specific words are not always necessary. While similes are mainly used in forms of poetry that compare the inanimate and the living, there are also terms in which similes and personifications are used for humorous purposes and comparison.

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METAPHOR

The English metaphor derived from the 16th-century Old French word métaphore, which comes from the Latin metaphora, "carrying over". Metaphor is a figure of speech which makes an implicit, implied or hidden comparison between two things that are unrelated but share some common characteristics. In other words, a resemblance of two contradictory or different objects is made based on a single or some common characteristics. 

        
            In simple English, when you portray a person, place, thing, or an action as being something else, even though it is not actually that “something else,” you are speaking metaphorically. “He is the black sheep of the family” is a metaphor because he is not a sheep and is not even black. However, we can use this comparison to describe an association of a black sheep with that person. A black sheep is an unusual animal and typically stays away from the herd, and the person you are describing shares similar characteristics.

           A metaphor is a figure of speech that refers to something as being the same as another thing for rhetorical effect. It may provide clarity or identify hidden similarities between two ideas. Where a simile compares two items, a metaphor directly equates them, and does not use "like" or "as" as does a simile. One of the most commonly cited examples of a metaphor in English literature is the "All the world's a stage" monologue from As You Like It:

All the world's a stage,

And all the men and women merely players;

They have their exits and their entrances[...]

—William Shakespeare, As You Like It,

       This quotation expresses a metaphor because the world is not literally a stage. By asserting that the world is a stage, Shakespeare uses points of comparison between the world and a stage to convey an understanding about the mechanics of the world and the behavior of the people within it. 

Metaphors are most frequently compared with similes. The Columbia Encyclopedia (6th edition) explains the difference as:

a simile states that A is like B, a metaphor states that A is B or substitutes B for A.

Source:

https://en.wikipedia.org/wiki/Metaphor

http://english.tutorvista.com/literary-response/metaphor.html

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AMBIGUITY

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