It is simpler if you set the next settings:
Difficulty Level: Easy
Fight Count: 1
Round Time: Infinite
You are allowed to utilize continues, that will have no influence on the achievement.
Note: In the event, you have "completed" the arcade mode and the achievement didn't pop, that means you skipped one character. To verify which one it was, just finish the arcade mode with the character of your preference. After naming your playthrough, you will notice the completion times for every character scrolling automatically. The one you have missed will most likely have a large time difference of approximately half an hour.