From Echoes of Angmar

As you progress through the game, you will earn Traits. Traits increase your capabilities in various ways. They are earned by completing Deeds, by completing quests, and (occasionally) simply by leveling. Each Trait falls into one of four categories: Virtues, Racial Traits, Class Traits, and Legendary Class Traits.

You can only have a few Traits active at a time. As your level increases you will unlock more available slots which will allow you to have more active Traits equipped at the same time. New Trait slots become available at the following levels:

Type Unlockable slots Slots unlocked at levels
Virtues 5 7 9 11 17 23
Racial Traits 5 13 19 25 31 37
Class Traits 5 15 21 27 33 39
Legendary Class Traits 2 41 45

The benefits of Traits range from small bonuses to your skills and attributes to unlocking heroic skills. Some bonuses derived from Traits stack, granting you even greater bonuses. Traits can give you a huge advantage and your 'valuation' of these traits will change as you progress through your career so you will want to collect as many of them as you possibly can.