"Save the money from you're first missions (DONT BUY BETTER WEAPONS!), then go to bowerstone south and buy all diamonds from the shopkeeper inside(you have to buy all the diamonds or this wont work.), and then you sell them back, and you make a profit.
Keep on doing this for about 10 minutes and you should be able to buy a master greatsword or maybe a platemail armor.

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If you want to win the arena as quick as possible, use an axe on the first round (against the bee's, and the axe is better then a sword because of the larger swing radius). and use the crossbow against the hobbes that throw those annoying orbs.
when you meet the earth trolls you should use youre crossbow and slowtime, this will make the earth troll seem just as easy as a normal bandit(this goes for the rocktrolls too).
When you finaly met arachanox, try to use slowtime and keep a good distance an shoot it in the green eye with youre crossbow, and when it charges on you, you should be quick to use assasinrush to run behind it and smash it with your axe/sword.
and for heavens sake, have alot of mana/health potions when you enter the arena." - notuern

"Use assassins rush when twinblades gonna do a big attack hit him the back a few times rinse and repeat if ur good u can kill him while takin no damage." - Famous warrior Gladiator