The Fool was born with the supernatural ability of "good luck at the expense of others", but was an otherwise ordinary person for most of his life. Despite living in a town plagued by an absurd amount of Fear activity, he was completely oblivious of their existence until his family was killed. He immediately went on the run after this and managed to avoid being harmed by several Fears thanks to his unique gift. His luck caught the attention of the House of Fortune, who sent one of its servants to observe what would happen if the Fool's life was endangered. Once his status as the "luckiest" man was confirmed, the House attempted to turn the Fool into its vessel so it could escape from the Singularity Cell. This plan failed, resulting in The Fool obtaining a portion of its power.
After witnessing the deaths of the fellow Runners he allied himself with, the Fool came to the realization that his mere presence was responsible for these tragedies. He ultimately decided to become a hermit in order to minimize the amount of trouble he causes, but people always end up finding him through sheer coincidence.
The Fool's luck has the inherent side effect of causing misfortune to whomever he meets. Major disasters often occur in his presence and people who encounter him usually experience painful deaths. For example, a group of Runners could be successfully avoiding the Fears for weeks until he joins them. This would cause a chain reaction in which a Nest hunting another group of Runners would bump into them and slaughter everyone with the exception of the Fool, who managed to survive because he fell into a hole or broke his leg. This has caused him to avoid any contact with other people as often as possible to prevent putting innocent lives in harm's way.
Although it wasn't apparent at first, the Fool's luck is not inherently good or bad. He is just as likely to be accident prone as any other human being and he is not incapable of having unfortunate events happen to him. The only real benefit his luck gives him is the uncanny ability to survive situations that would be fatal to anyone else. This was first established in the blog A Match in the Cellar when the Fool was able to escape from a hospital that The Plague Doctor visited despite being injected with anesthetic by an Oathbreaker. The Fool's survival based luck has essentially made him immortal as it prevents him from dying from old age, disease or physical harm.