England were on course to win the U21 Euros through Curtis Jones' deflected strike before Spain were handed a penalty in the last minute.
Levi Colwill was harshly adjudged to have fouled Abel Ruiz in the 96th minute that saw the referee turn to the VAR pitchside monitor.
Up stepped Ruiz in the most dramatic of moments that would have sent the match to extra-time.
But Trafford flung himself to his right to save the Braga star's effort before getting up straight away to push a rebounded shot away as well.
It comes just days after agreeing a £19million switch to Burnley despite not playing a single minute for Manchester City.
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And the 20-year-old, who was on loan at League One outfit Bolton last year, has won over any doubters.
One fan wrote: "For £19million, Burnley have got themselves an absolute bargain in James Trafford. I truly believe he's ready for Premier League football."
Another posted: "James Trafford WOW! £19m BARGAIN for Burnley."
And a third said: "James Trafford, £19m? Bargain! What a result for England, Euro U21 champions without conceding a goal!"
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England had not won the tournament since 1984, ending 39 years of hurt.
But Lee Carsley's men put on a tremendous show from front to back, particularly in defence.
The Young Lions did not concede a single goal throughout the competition with Trafford keeping six clean sheets.
The youngster became the first goalkeeper to do so - and he had to do it the hard way with his last-gasp penalty save.
Earlier in the final, Jones had put England a goal up in quite a bizarre manner.
Cole Palmer hit a free-kick that deflected off the Liverpool star's back, looping into the top corner.
Arnau Tenas in the Spain net could only watch as the ball sailed past him, which turned out to be the only goal of the game.