An open system is one where the fluid flows from the pump through the valves and back to the tank. This means that the pump provides a continuous flow to the hydraulic system. In addition, an open circuit is a one-way circuit, which means that the fluid can only flow in one direction.
On the other hand, in a closed-loop hydraulic system, the fluid from the piston pump flows directly to a motor and back to the pump without passing through the reservoir. The special feature of this type of system is its bi-directional operation.
For more explanations, see our ARTICLE ON THE DIFFERENCES BETWEEN AN OPEN AND CLOSED HYDRAULIC SYSTEM.