As suggested, let $g(x)=\frac{f(x)}{1+f(x)}$. Then $f(x)=\frac{g(x)}{1-g(x)}$. Thus
$$\frac{g(x+y)}{1-g(x+y)}=\frac{\frac{g(x)}{1-g(x)}+\frac{g(y)}{1-g(y)}+2\frac{g(x)}{1-g(x)} \cdot \frac{g(y)}{1-g(y)}}{1-\frac{g(x)}{1-g(x)} \cdot\frac{g(y)}{1-g(y)}}=\frac{g(x)+g(y)}{1-(g(x)+g(y))}.$$
So
$$\frac{g(x+y)}{1-g(x+y)}=\frac{g(x)+g(y)}{1-(g(x)+g(y))}.$$
Since the function $\frac{t}{1-t}$ is monotone, we conclude from the above equality that
$$g(x+y)=g(x)+g(y).$$
Thus $g(x)$ is a linear function with $g(0)=0$, and therefore $g(x)=mx$ for some $m \in \mathbb{R}$. Therefore if
$$f(x)=\frac{mx}{1-mx}, m \in \mathbb{R},$$
then the identity in the statement of the problem will hold for points in the domain of the functions in the left and right hand sides, i.e.
$$x,y \neq \frac{1}{m}, \ \ x+y \neq \frac{1}{m}.$$
If the problem really wants the identity to be satisfied for all $x,y \in \mathbb{R}$, then the domain of $f$ has to be all of $\mathbb{R}$, and hence the only function satisfying the assumptions is $f=0$ (m=0).