We review the literature on the hot hand fallacy by highlighting the positive and negative aspects of hot hand research over the past 20 years, and suggesting new avenues of research. Many researchers have focused on criticising Gilovich et al.'s claim that the hot hand fallacy exists in basketball and other sports, instead of exploring the general implications of the hot hand fallacy for human cognition and probabilistic reasoning. Noting that researchers have shown that people perceive hot streaks in a gambling domain in which systematic streaks cannot possibly exist, we suggest that researchers have paid too much attention to investigating the independence of outcomes in various sporting domains. Instead, we advocate a domain-general mechanistic approach to understanding the hot hand fallacy, and conclude by suggesting approaches that might refocus the literature on the important general implications of the hot hand fallacy for human probabilistic reasoning.