The system shown is a Hydraulic System or Hydraulic Circuit.

The pump (6) draws hydraulic fluid from the reservoir (8) through the filter (7) and delivers it under pressure to the system. The pressure relief valve (5) protects the pump and system from excessive pressure by diverting fluid back to the reservoir if the set pressure is exceeded. The pressure gauge (12) indicates the system pressure.

The 4/3-way directional control valve (4) is the main control element. When shifted to one position, it directs pressurized fluid to either cylinder 1 or cylinder 2, causing it to extend. Simultaneously, it provides a path for the fluid from the opposite side of the cylinder to return to the tank.

The counterbalance valve (10) is crucial for controlling the movement of the cylinders, especially when lowering a load. It is a pilot-operated relief valve that requires a pilot pressure from the advancing side of the cylinder to open. This ensures that the cylinder does not "run away" or free-fall under the influence of a load, maintaining a controlled descent by creating back pressure.

When the directional control valve (4) is in its center (neutral) position, the cylinders are held in place, and the pump flow is typically blocked or returned to the tank. Fluid returning from the cylinders, after passing through the counterbalance valve (10) and directional control valve (4), flows back to the reservoir (8).