Finely chop onions, dividing into 1 1/2 cups and 1/2 cup portions.

Line a colander with a kitchen towel.

In a large bowl, stir together 1 1/2 cups of chopped onions, egg, salt, and pepper.

Place the remaining 1/2 cup of onions in a food processor.

Add peeled and cut potatoes to the processor.

Blend until the potatoes are very finely chopped and partially pureed.

Transfer the potato mixture to the prepared colander.

Wrap the towel around the potatoes and squeeze out as much liquid as possible.

Scrape the squeezed potato mixture into the bowl with the egg mixture.

Stir in all-purpose flour and baking powder.

Heat 4 tablespoons of vegetable oil in a heavy large skillet over medium-high heat.

Drop the potato mixture by scant 1/4 cupfuls into the skillet.

Flatten each latke to a 2 1/2-inch round with a metal spatula.

Reduce heat to medium.

Cook until golden brown, about 4 minutes per side.

Transfer the cooked latkes to a large rimmed baking sheet.

Repeat the process, adding more oil to the skillet as needed.

Latkes can be made up to 2 hours ahead and left to stand at room temperature.

Preheat the oven to 425F.

Bake the latkes until crisp and deep brown, about 6 minutes per side.

For the salad, whisk together olive oil, sherry wine vinegar, and dry mustard in a small bowl.

Season the dressing with salt and pepper.

Combine watercress, diced avocado, and sliced smoked salmon in a large bowl.

Toss the salad with enough dressing to coat.

Arrange 2 latkes on each plate.

Mound the salad alongside the latkes.